PCS Technology Limited

Transcription

1 PCS Technology Limited 30th annual report

2 CONTENTS Notice to Members 23 Directors Report 47 Report on Corporate Governance 812 CEO/CFO Certificate 13 Auditors Report 1415 Balance Sheet 16 Profit & Loss Account 17 Cash Flow Statement 18 Schedules & Notes to Balance Sheet & Profit & Loss Account 1930 Balance Sheet Abstract 31 Statement Relating to Subsidiary Company 31 Accounts of Subsidiary Companies 3248 Auditors Report on the Consolidated Financial Statements 49 Consolidated Balance Sheet 50 Consolidated Profit & Loss Account 51 Consolidated Cash Flow Statement 52 Schedules & Notes to Consolidated Balance Sheet & Profit & Loss Account 5363 Proxy

3 PCS TECHNOLOGY LIMITED BOARD OF DIRECTORS Mr. G. K. Patni Mr. A. K. Patni Mr. H. C. Tandon Mr. N. K. Patni Mr. Apoorva Patni Mr. Satish Ajmera Mr. D. B. Engineer Mr. G. M. Dave Mr. P. V. Mehta Mr. K. K. Barjatya Chairman Vice Chairman Managing Director & CEO Director Director Director Director Director Director Director COMPANY SECRETARY Mr. Bhaskar J. Patel AUDITORS S. C. Bandi & Co. Chartered Accountants, Mumbai BANKERS Canara Bank Indian Bank IDBI Bank Limited Dena Bank Standard Chartered Bank Indian Overseas Bank Limited Union Bank of India Central Bank of India REGISTERED OFFICE Plot No. 148/151, Alandi Markaal Road, Village Dhanore, Alandi, Dist. Pune PLANT LOCATION Plot No. 148/151 Alandi Markaal Road, Village Dhanore, Alandi, Dist. Pune REGISTRAR & SHARE TRANSFER AGENT M/s. Bigshare Services Pvt. Ltd. E2/3, Ansa Industrial Estate, Saki Vihar Road, Saki Naka, Andheri (E), Mumbai Tel. : / Fax : TH ANNUAL GENERAL MEETING Day, Date & Time : Wednesday, 7th September, 2011 at a.m. Venue : Plot No. 148/151, Alandi Markaal Road, Village Dhanore, Alandi, Dist. Pune MEMBERS ARE REQUESTED TO BRING THEIR COPY OF THE ANNUAL REPORT ALONG WITH THEM AT THE ANNUAL GENERAL MEETING

4 PCS TECHNOLOGY LIMITED NOTICE TO MEMBERS NOTICE is hereby given that the 30 th ANNUAL GENERAL MEETING of PCS Technology Limited will be held at the Registered Office of the Company at 148/151, Alandi Markaal Road, Village Dhanore, Alandi, Dist. Pune on Wednesday, 7th September, 2011 at a.m. to transact the following business. ORDINARY BUSINESS: 1. To receive, consider and adopt the Audited Balance Sheet as at 31 st March, 2011 and the Profit & Loss Account of the Company for the year ended on that date and the Reports of the Directors and Auditors thereon. 2. To appoint a Director in place of Mr. P. V. Mehta who retires by rotation and being eligible, offers himself for reappointment. 3. To appoint a Director in place of Mr. Satish Ajmera who retires by rotation and being eligible, offers himself for reappointment. 4. To appoint a Director in place of Mr. G.M.Dave who retires by rotation and being eligible, offers himself for reappointment. 5. To appoint Auditors to hold office until the conclusion of the next Annual General Meeting and to fix their remuneration. Registered Office: 148/151 Alandi Markaal Road, Village Dhanore Alandi Dist Pune By Order of the Board For PCS Technology Ltd. Bhaskar J Patel Company Secretary Mumbai, 31st May, 2011 NOTES : (1) A MEMBER ENTITLED TO ATTEND AND VOTE AT THE MEETING IS ENTITLED TO APPOINT A PROXY TO ATTEND AND ON A POLL, TO VOTE INSTEAD OF HIMSELF OR HERSELF. A PROXY NEED NOT BE A MEMBER OF THE COMPANY. PROXIES, IN ORDER TO BE EFFECTIVE MUST BE RECEIVED AT THE REGISTERED OFFICE OF THE COMPANY NOT LESS THAN 48 HOURS BEFORE THE COMMENCEMENT OF THE MEETING. (2) The Register of Members and Share Transfer Books of the Company will remain closed from Thursday, 1st September, 2011 to Wednesday, 7th September, 2011, both days inclusive. (3) Members are requested to: (a) intimate to the Company / their Depository Participant ( DP ), changes, if any, in their registered address at an early date and also thier ID. (b) quote their Registered Folio No. and/or DP Identity and Client Identity number in their correspondence; (c) bring their copy of the Annual Report and the Attendance Slip with them at the Annual General Meeting. (d) to send their queries, if any, at least 10 (ten) days in advance of the meeting so that the information can be made available at the meeting. (4) Information pursuant to Clause 49 of the Listing Agreement for Appointment / Reappointment of Directors: Name of the Director Date of Birth Date of Appointment Directorships in other companies incorporated in India Chairman/Member of Other Committees of other Companies Mr. P. V. Mehta Advani Hotels & Resorts Ltd Member of the Audit Committee, Member of the Remuneration Committee, Bharat Bijlee Ltd. Member of the Audit Committee, Member of the Remuneration Committee, Member of the Shareholders /Investors Grievance Committee 2

5 THIRTIETH ANNUAL REPORT Name of the Director Date of Birth Date of Appointment Directorships in other companies incorporated in India Chairman/Member of Other Committees of other Companies Hikal Ltd. Member of the Audit Committee, Member of the Remuneration Committee, Member of the Shareholders /Investors Grievance Committee India Safety Vault Ltd. JBF Industries Ltd Chairman of Remuneration Committee, Member of the Shareholders /Investors Grievance Committee Mukund Ltd. Member of the Audit Committee, Member of the Remuneration Committee, Mukund Engineers Ltd Member of the Audit Committee Rajasvi Properties Holdings Pvt. Ltd. Tulsidas Khimji Pvt. Ltd. W.H. Brady & Co. Ltd. Shopping Centre Management Services Pvt. Ltd. Mr. Satish Ajmera Wires and Fabriks(S.A) Ltd Member of the Audit Committee Member of the Shareholders /Investors Grievance Committee The Lakshmi Mills Co. Ltd. Chairman of the Audit Committee FCI Arawali Gypsum and Minerals Chairman of the Audit Committee India Ltd. S.Ajmera Finance Pvt. Ltd A & A Mines and Minerals Pvt. Ltd. Member of the Audit Committee SRP Infosystems Pvt. Ltd. Mr. G.M. Dave Vinati Organics Ltd. Chairman of the Audit Committee Ultratech Cement Ltd. Member of the Audit Committee Member of the Shareholders /Investors Grievance Committee, Member of the Remuneration Committee, Grasim Bhiwani Textiles Ltd Member of the Audit Committee Cinemax India Ltd. Member of the Audit Committee, Member of the Remuneration Committee, Aditya Birla Retail Ltd. Chairman of the Audit Committee, Member of the Remuneration Committee, H A S Two Holding Pvt. Ltd. Terrafirma Agroprocessing (India) Pvt. Ltd. Fabmall (India) Pvt. Ltd. Trinethra Superretail Pvt. Ltd. Chairman of the Audit Committee, Member of the Remuneration Committee, Camphor & Allied Products Ltd. Member of the Audit Committee, Member of the Remuneration Committee, Birla Family Investments Private Ltd.(formally known as Kornerinvest Capital Pvt. Ltd) 3

6 PCS TECHNOLOGY LIMITED DIRECTORS REPORT The Members, PCS TECHNOLOGY LIMITED Your Directors have the pleasure in presenting their Thirtieth Annual Report together with Audited Accounts for financial year ended 31st March FINANCIAL RESULTS (Rs. In lacs) Particulars (12 Months) Financial Year ended (9 Months) Financial Period ended Gross Revenue 19,137 19,880 Gross Profit 815 1,002 Depreciation Profit for the year from Operations Bad Debts, Remission & Exceptional items Provision for Taxation (Net) Profit for the year Net Surplus available for Appropriation Balance Carried to Balance Sheet OPERATIONS During the year under review, your Company has achieved Gross Revenue of Rs.191 crores as against Rs 198 crores in the previous period. The Computer Hardware business of your Company has declined over the years due to stiff competitions from MNC and unbranded products. Margin from hardware business continue to remain under pressure. The cash inflow too remains tight demanding high working capital. The Directors of your Company has been evaluating to probably discontinue the Computer Hardware manufacturing and shift its focus more on IT and IT enabled services where margins are much better. DIVIDEND In order to conserve the resources of the Company, your Directors express their inability to recommend any dividend for the financial year ended 31st March SALE OF ASSETS Your company has acquired new office premises being 6th and 7th Floor in the building known as Technocity, situate at MIDC area, Mahape, Navi Mumbai and intends to shift its Mumbai operations to these premises. With this we propose to sell surplus properities at Alandi (Pune) and Sakinaka (Mumbai). The proposed sale is in the interest of shareholders and the business. DIRECTORS Mr. M. Y Kulkarni has resigned as Director of the Company w. e. f. 20 th April, 2011 The Board places on record its sincere appreciation for the valuable services rendered by him during the tenure of his office as the Director of the Company. As per Article 135 of the Articles of Association of the Company, Mr. P. V. Mehta, Mr. Satish Ajmera and Mr. G. M. Dave Directors of the Company retire by rotation at the ensuing Annual General Meeting and being eligible offer themselves for reappointment on the Board of your company. A brief note on Directors retiring by rotation and being eligible for reappointment is furnished in the notice convening the Annual General Meeting. DIRECTORS RESPONSIBILITY STATEMENT Pursuant to subsection (2AA) of Section 217 of the Companies Act, 1956, the Board of Directors of the Company hereby confirms that: 1. In the preparation of the Annual Accounts, the applicable accounting standards have been followed along with proper explanation relating to material departures; 4

7 THIRTIETH ANNUAL REPORT Appropriate accounting policies have been selected and applied consistently and have made judgements and estimates that are reasonable and prudent, so as to give a true and fair view of the state of affairs of the company as at 31st March, 2011 and of the profit of the company for the said year; 3. Proper and sufficient care has been taken for the maintenance of adequate accounting records in accordance with the provisions of the Companies Act, 1956 for safeguarding the assets of the company and for preventing and detecting fraud and other irregularities; 4. Annual Accounts have been prepared on a going concern basis. CORPORATE GOVERNANCE A report on Corporate Governance and Management Discussion Analysis is included as a part of the Annual Report along with a Certificate from the Statutory Auditors of the Company regarding compliance of conditions of Corporate Governance as stipulated under Clause 49 of the amended Listing Agreement. DEPOSITS Your Company has neither invited nor accepted any deposits from the public so far. SUBSIDIARY COMPANY As required under Section 212 of the Companies Act, 1956 the Audited Balance sheet and Profit & Loss Account and the respective reports of the Board of Directors and Auditors for the financial year ended 31st March 2011 of PCS International Limited, Mauritius and PCS Technology USA, Inc. and PCS Positioning Systems (India) Limited are annexed. AUDITORS The Company s auditors, M/s. S. C. Bandi & Co. Chartered Accountants, retire and are eligible for reappointment. Your Directors recommend their reappointment for the ensuing year. PARTICULARS OF EMPLOYEES During the financial year, there were no employees drawing remuneration in excess of the monetary ceiling prescribed under Section 217(2A) of the Companies Act, 1956 read with Companies (Particulars of Employees) Rules, 1975, as amended. CONSERVATION OF ENERGY, TECHNOLOGY ABSORPTION AND FOREIGN EXCHANGE EARNINGS/OUTGO The Information required under the above heads in accordance with the provision of section 217(1) (e) of the companies (Disclosure of Particulars in the Report of the Board of Directors) Rules, 1988, are given in Annexure A to this report. ACKNOWLEDGEMENTS Your directors express their warm appreciation to all the employees at various units for their diligence and contribution made towards the growth of the Company. The Board of Directors place on record their appreciation for the unstinted support by the Bankers and Financial Institutions and confidence given by the Customers, Suppliers and Shareholder at all levels towards the growth and development of the Company. On behalf of the Board of Directors Mumbai, 31 st May, 2011 G. K. Patni Chairman 5

8 PCS TECHNOLOGY LIMITED ANNEXURE A TO THE DIRECTORS REPORT Particulars required under the Companies (Disclosure of Particulars in the Report of the Board of Directors) Rule, (A) Conservation of Energy The Computer Assembly Division of the Company uses only electricity, which is very insignificant in value while considering total volume of operations. (B) Technology Absorption Not applicable (C) Foreign Exchange Earnings/Outgo Your Company has earned foreign exchange worth Rs. 397 Lacs and has spent foreign exchange worth Rs 939 Lacs under the following heads. Particulars: (Rs. In Lacs) (i) Raw Material and Components 721 (ii) Capital Goods (iii) Other Expenses 218 Total 939 On behalf of the Board of Directors Mumbai, 31 st May, 2011 G. K. Patni Chairman 6

9 THIRTIETH ANNUAL REPORT MANAGEMENT DISCUSSIONS AND ANALYSIS Industry Scenario & Review The financial year witnessed challenges. The prices of PC and peripherals continued to drop over the past few years. The price competition continued with MNC and unbranded products putting pressure on margins. Performance & Review Computer Division The Computer Division has recorded a Gross Turnover of Rs. 191 crores (12 months) as against previous Period Rs 198 crores (9 months). The key contributors to PC business has been from the Government segment through Rate Contracts with DGS&D, Banking and State governments. The Company continued to give more focus on IT Service business over PC sales. Operations The computer hardware sales has declined over the years due to insufficient margins. The Management finds that hardware business is no longer contributing to profit and cash flow and it should now divert its focus more on IT and IT enabled services. The initiatives taken by the Company in verticals such as Laboratory and Hospital management solutions, GPS, Facilities management, Document management, IT consulting, Enterprise Solutions, Video Conferencing and Telecom have begun in promoting sales. The Company has added client in overseas market of Africa, and UAE and the results are encouraging. Opportunities, Threats & Risks The Company is operating its hardware business in an environment which is more competitive and declining margins. The growth prospects of the domestic PC sales remain subdued as company faces price competition, technological obsolescence and thin profit margin resulting in low operating profit. The Management is evaluating to probably discontinue hardware manufacturing. Future Outlook In an effort to shore up margins, the company will focus more on value added IT services namely IT Consulting, Enterprise Solutions, Laboratory and Hospital Management solutions, Telecom, Video Conferencing and Document management. The company feels that margins are much better in this area. With the service verticals commanding higher margins than the IT hardware business the company has started focusing more towards value added IT services for a better bottom line in the upcoming year. Overseas Subsidiaries PCS International Ltd., Mauritius The Company has initiated into providing Consultancy in information technology services in Middle East, West Asia and African markets. The Laboratory and Hospital Solutions have evoked good enquiries from medical sector. PCS Technology USA, Inc. The US Company offers its services to customers through IT facility management. There was an impact of US recessionary trends on company s sales and profitability. Indian Subsidiary PCS Positioning Systems (India) Limited The plans are under way to revive the business in near future. Internal Control and Adequacy The Company has a proper and adequate system of internal control to ensure that all the assets are safeguard, protected against loss from unauthorised use or disposition and those transactions are authorised, recorded and reported correctly. The internal audit reports are reviewed for corrective actions wherever required. The views of statutory auditors are also considered to ascertain the adequacy of the internal control system. Human Resources Human resources are a valuable assets and Company seek to attract and retain the best talent available. Systematic training, development, continuance of productivity and employee satisfactions is some of the highlight of human resources development activities during the year. Employee relations continued to be cordial. Your Directors acknowledge and thanks employees for their continued contribution. Cautionary Statement Statement in this Management Discussions and Analysis describing company s objective and predictions may be forward looking statement within the meaning of applicable laws and regulations. Actual results may differ from those expressed herein. Important factors that could make difference to the operations include Government regulations, tax structures, and country s economic development, availability of input and their prices and other incidental factors. 7

10 PCS TECHNOLOGY LIMITED REPORT ON CORPORATE GOVERNANCE Pursuant to Clause 49 of the Listing Agreement with Stock Exchanges The following is a report on the ongoing implementation of the Code by your Company. 1. Company s philosophy on Corporate Governance The Company firmly believes in good Corporate Governance and has endeavored to practice and improve its focus on it by increasing transparency and accountability to its shareholders in particular and other stakeholders in general. 2. Board of Directors (Board) The Board of Directors has an optimum mix of Executive and NonExecutive Independent Directors. The present strength of Board is Ten members comprising one Managing Director. There are Five NonExecutive Independent Directors on the Board, which is in conformity with the amended Clause 49(1) (A) of the Listing Agreement. The NonExecutive Directors bring independent judgment in the Board s deliberations and decisions. Independent Directors are Directors, who apart from receiving Director s Sitting Fees and Professional Fees paid to the firm in which some of the Directors are Partners as disclosed in the Notes to Accounts, do not have any other material pecuniary relationship or transactions with the Company, its promoters, its management or its subsidiaries, which in the judgment of the Board may affect the independence of the judgment of the Director. Board Meetings held during the financial Year ended 31st March (Five) board meeting were held during the financial year ended on 31 st March, 2011 on the following dates: , , , , Details of attendance at the Board meetings, Annual General meeting and shareholding of each Director are as follows: Name of the Director Category No. of board meetings attended Mr. G. K. Patni Chairman Mr. A. K. Patni Vice Chairman Mr. N. K. Patni Attendance at last AGM held on No. of Equity shares held in the Company * Promoter NonExecutive 5 YES Promoter NonExecutive 4 NO Promoter NonExecutive & Non Independent None NO Mr. Apoorva Patni Non Executive & Non Independent 2 NO Mr. D. B. Engineer Non Executive & Independent 5 NO Nil Mr. Satish Ajmera Non Executive & Independent 5 YES 236 Mr. P. V. Mehta Non Executive & Independent 4 NO Nil Mr. G. M. Dave Non Executive & Independent 5 NO 100 Mr. M. Y. Kulkarni ** Non Executive & Independent 3 NO Nil Mr. K. K. Barjatya Non Executive & Independent 5 NO 316 Mr. H. C. Tandon Managing Director & CEO Executive 5 YES 432 * The above shareholding as at 31 st March, 2011 is in respect of shares which are held by Directors as a first holder and in which shares they have beneficial interest ** Resigned as Director w.e.f 20/04/2011 and also ceased to be a member of the committees 8

11 THIRTIETH ANNUAL REPORT REPORT ON CORPORATE GOVERNANCE (contd.) Number of other Companies or Committees of which the Director is a Director/Member/Chairman (excluding the Company) : Name of Director No. of other public limited Companies in which he is Director * No. of Board Committees in which he is ** Member Chairman Mr. G. K. Patni Mr. A. K. Patni 2 Mr. D. B. Engineer Mr. Satish Ajmera Mr. P. V. Mehta 8 8 Mr. G. M. Dave Mr. M. Y. Kulkarni *** Mr. K. K. Barjatya Mr. N. K. Patni Mr. H. C. Tandon Mr. Apoorva Patni 4 1 * Exclude Directorships in Indian Private Limited Companies, membership of Managing Committees of various bodies. ** Board Committees include Chairmanship/ Membership of Audit Committees and Shareholder Grievance Committees of public limited companies whether listed or not. *** Resigned as Director w.e.f 20/04/2011 and also ceased to be a member of the committees CODE OF CONDUCT The Board has laid down a code of conduct for Board members and senior management staff of the Company. The said code of conduct is posted on Company s website. The Board members and senior management staff have affirmed compliance with the said code of conduct. 3. AUDIT COMMITTEE Since Mr. M.Y.Kulkarni has resigned as director of the Company and also ceased to be member of this committee, the Company has reconstituted Audit Committee comprises of Mr. Satish Ajmera as Chairman, Mr. G.M Dave, Mr. K.K.Barjatya and Mr. D.B. Engineer* being Independent Director is in compliance with the revised clause 49 of the listing agreement. Audit Committee meetings are attended by General Manager Finance and Accounts & CFO and of Statutory Auditors. The Company Secretary acts as the Secretary to the Audit Committee. * Appointed as member of this committee w.e.f. 31/5/2011 TERMS OF REFERENCE The Terms of Reference of this Committee covers the matters specified for Audit Committee under Clause 49 of the Listing Agreement as well as in Section 292A of the Companies Act, MEETINGS AND ATTENDANCE DURING THE YEAR ENDED 31st MARCH, 2011 During the financial year Five Audit Committee Meetings were held on , , , , respectively.the attendance of the Members at these Meetings during the Financial Year is as follows: Name of Director Status No. of Meetings attended Mr. Satish Ajmera Nonexecutive/ Independent Director 5 Mr. K. K. Barjatya Nonexecutive/ Independent Director 5 Mr. G. M. Dave Nonexecutive/ Independent Director 5 Mr. M. Y. Kulkarni * Nonexecutive/ Independent Director 3 * Resigned as Director w.e.f 20/04/2011 and also ceased to be a member of this committee 4. REMUNERATION / COMPENSATION COMMITTEE The Compensation and Remuneration Committee was set up on 28th July, 2007, by merging the Compensation Committee with Remuneration Committee. The main function of the Committee is To determine/review the Company s policy on specific remuneration packages for Executive/ Wholetime Directors of the Company and also; To review the overall compensation structure and policies of the Company to attract, motivate and retain employees as well as to consider grant of stock options to permanent employees of the Company, its Directors (including Wholetime Directors) of the Company. It will also administer ESOP Plan The Compensation and Remuneration committee comprising of three Independent Directors namely Mr. G. M. Dave as Chairman of the Committee, Mr. P. V. Mehta and Mr. K. K. Barjatya. The members in AGM held on 30 th September, 2004 have approved ESOP Plan 2004 and has obtained inprinciple approval from Bombay Stock Exchange and Pune Stock Exchange. The said ESOP Plan 2004 has not been implemented so far. The Company has one Wholetime Director on the Board. His appointment and remuneration has been fixed by the Board in terms of resolution passed by the Members in the Annual General Meeting. Details of remuneration paid to Wholetime Directors for the financial year ended March 31, 2011 are as under: Name of Status Salary Perquisites/ PF Remuneration Director Allowances Contribution Paid (in Rs.) Mr. H. C. Managing Tandon Director & 20,08,500 30,000 2,01,600 22,40,100 CEO 9

12 PCS TECHNOLOGY LIMITED REPORT ON CORPORATE GOVERNANCE (contd.) Nonexecutive (except promoter) and Independent Directors are paid sitting fees for attending each Meeting of the Board and its Committee. Details of payments made to NonExecutive Directors for the financial year ended 31 st March, 2011 are as under: Name of the Director Sitting fees Commission Paid Paid Mr. Satish Ajmera 110,000/ NIL Mr. G. M. Dave 110,000/ NIL Mr. P. V. Mehta 50,000/ NIL Mr. M. Y. Kulkarni * 60,000/ NIL Mr. K. K. Barjatya 110,000/ NIL Mr. D. B. Engineer 50,000/ NIL * Resigned as Director w.e.f 20/04/2011 and also ceased to be a member of the committees. 5. Shareholders /Investors Grievance Committee The Shareholders /Investors Grievance Committee consists of four members, two Non Executive (Promoter Director) and two NonExecutive Independent Directors. Mr. Satish Ajmera, NonExecutive and Independent Director is the Chairman of this Committee. The names of the members of the Committee are as under: Mr. G. K. Patni Mr. A. K. Patni Mr. M. Y. Kulkarni* Mr. Satish Ajmera Mr. D.B. Engineer** * Resigned as Director w.e.f 20/04/2011 and also ceased to be a member of this committee. ** Appointed as member of this committee w.e.f 31/05/2011 Mr. Bhaskar J. Patel, Company Secretary is the Compliance Officer of the Company. This Committee monitors share transfers, transmissions and other shareholders related activities including redressal of investor grievances. During the year 59 investor complaints/queries were received. There were NIL complaints/queries pending as on March 31, There were no share transfers pending for more than 30 days as on the said date. 6. GENERAL BODY MEETINGS A. The details of Annual General Meetings held in the last three years are as under: AGM for the F.Y. ended Date & time of AGM at a.m. Place of AGM 148/151, Alandi Markaal Road, Village Dhanore, Alandi, Dist. Pune Special Resolutions Passed None at a.m at a.m. 148/151, Alandi Markaal Road, Village Dhanore, Alandi, Dist. Pune /151, Alandi Markaal Road, Village Dhanore, Alandi, Dist. Pune None Yes For the appointment of Mr. H. C. Tandon as MD & CEO of the Company w.e.f. 25/11/2010. All the resolutions including special resolutions set out in the respective notices calling the AGM were passed by the shareholders. No postal ballots were used for voting at these meetings. There is no proposal to pass any Special Resolution through postal ballot at the ensuing Annual General Meeting. However the Company has considered to carry out postal ballot process for seeking the approval of shareholders of the Company in the matter related to sale/disposal of the Company s immovable property situated at AlandiPune and SakinakaAndheriMumbai in the month of June/July Disclosures i) Disclosure on materially significant related party transactions that may have potential conflict with the interest of the Company at large. None Transactions with the related parties are disclosed in the notes to the accounts forming part of the Annual Report. ii) Details of noncompliance by the Company, penalties and strictures imposed on the Company by SEBI, ROC, Stock Exchanges or any other statutory authorities on any matter related to capital market during the last 3 financial years. None. iii) The Company has complied with all the mandatory requirements of Corporate Governance under Clause 49 of the Listing Agreement. The Company is yet to adopt the nonmandatory requirements of the Clause 49 of the Listing Agreement pertaining to Corporate Governance. iv) The CEO/CFO certification form part of this Annual Report. 8. Means of Communication The quarterly and half yearly results are forthwith communicated to all the Stock Exchanges with whom the Company has listing arrangements as soon as they are approved and taken on record by the Board of Directors of the Company. Further the results are published in the leading newspapers in compliance with the Listing Agreement. Management discussion and Analysis forms part of the Annual Report, which is posted to the Shareholders of the Company. 10

13 THIRTIETH ANNUAL REPORT REPORT ON CORPORATE GOVERNANCE (contd.) The Company also issues financial results to the print media. Information about the Company would be available on its website. 9. GENERAL SHAREHOLDER INFORMATION Date, time & venue of the Annual General Meeting : September 7, 2011 at a.m. at 148/151, Alandi Markaal Road, Village Dhanore, Alandi, Dist. Pune Financial Calendar i Financial Year : April to March ii First Quarterly Results : Before 15 th August 2011 iii Half Yearly Results : Before 15 th November 2011 iv Third Quarter Results : Before 15 th February 2012 v Audited results : By end of May 2012 Date of Book Closure : 01/09/2011 to 07/09/2011 (both days inclusive) Dividend Payment : Not Applicable Date Listing at Stock : a) Pune Stock Exchange Limited ( 11179) Exchanges (Stock Code) b) The Bombay Stock Exchange Limited, Mumbai (517119) ISIN Number for NSDL & CDSL : INE 834B01012 Annual Listing Fees have been paid to Bombay stock Exchange and Pune Stock Exchange for the year Market Price Data : High/Low of Market price of the Company s shares traded on Bombay Stock Exchange (BSE) during the financial year furnished below: Year Month Highest Lowest 2010 April May June July August September October November December January February March Graph of Share Price/ BSE Sensex : see Annexure A REGISTRARS AND TRANSFER AGENT : M/s. Bigshare Services Private Limited FOR SHARES HELD IN DEMAT E 2/3, Ansa Industrial Estate, AS WELL AS PHYSICAL FORM Saki Vihar Road, Saki Naka, Andheri (East), Mumbai Tel.: / 0653, Fax: Share Transfer system : All share transfers, subject to correctness and completion of all documents would normally be registered and returned within 2 weeks from the date of receipt. The distribution of shareholding as on March 31, 2011 is as follows : No. of equity shares held No. of No. of shareholders % shares % Upto to to to to to to & above Grand Total No. of shares in Physical Mode No. of shares in Electronic Mode Shareholding pattern as on March 31, 2011 is as follows : Category No. of No. of shares % holding shareholders Indian Promoters Banks, FIs and Insurance Companies UTI and Mutual Funds FIIs, NRIs and OCB Domestic Companies Resident Individuals Clearing Member Trusts Total Dematerialisation of shares and liquidity : % of the paidup share capital has been dematerialised as on 31 st March, Outstanding GDRs/ADRs/ warrants/ convertible : Not applicable since none of the said instruments are ever issued. instruments etc Plant Location : Village Dhanore, Alandi, Dist. Pune. Address for Correspondence: Shareholders may correspond on all matters relating to transfer/dematerialization of shares and any other query relating to shares of the Company at the below mentioned address: M/s. Bigshare Services Private Limited E 2/3, Ansa Industrial Estate, Saki Vihar Road, Saki Naka, Andheri (East), Mumbai Tel.: / 0653, Fax:

14 PCS TECHNOLOGY LIMITED To, The Members of PCS Technology Limited It is hereby certified and confirmed that as provided in Clause 49 I (D) of the listing agreement with the stock exchanges, the Board members and the Senior Management personnel of the Company have affirmed compliance with the Code of Conduct of the Company for the financial year ended on 31 st March, For PCS Technology Limited H. C. Tandon Managing Director & CEO Place : Mumbai Date : 31 st May, 2011 AUDITORS CERTIFICATE ON CORPORATE GOVERNANCE To the Members of PCS TECHNOLOGY LIMITED I have examined the Compliance of conditions of Corporate Governance by PCS Technology Limited for the financial year ended on 31 st March, 2011 as stipulated in Clause 49 of the Listing Agreement of the said company with the Stock Exchanges. The compliance of conditions of Corporate Governance is the responsibility of the management. My examination was limited to procedures and implementation thereof, adopted by the Company for ensuring the compliance of the conditions of the Corporate Governance. It is neither an audit nor an expression of opinion on the financial statements of the Company. In my opinion and to the best of my information and explanations given to me I certify that the Company has generally complied with the conditions of Corporate Governance as stipulated in the above mentioned listing agreement. I further state that, such compliance is neither an assurance as to future viability of the Company, nor the efficiency or effectiveness with which the management has conducted the affairs of the Company. 31 st May, 2011 For S. C. BANDI & COMPANY Chartered Accountants S. C. Bandi (Proprietor) M. No

15 THIRTIETH ANNUAL REPORT Certification by the Chief Executive Officer (CEO) and Chief Financial Officer (CFO) on Financial Statements of the Company We H C Tandon, Managing Director & CEO and M P Jain, Chief Financial Officer, of PCS Technology Limited, certify that : (a) We have reviewed financial statements and the cash flow statement for the financial year ended on 31 st March, 2011 and that to the best of our knowledge and belief; i. these financial statements do not contain any materially untrue statement or omit any material fact or contain statements that might be misleading; ii. these statements together present a true and fair view of the Company s affairs and are in compliance with existing accounting standards, applicable laws and regulations. (b) There are, to the best of our knowledge and belief, no transaction is entered into by the company during the year which is fraudulent, illegal or violative of the Company s code of conduct. (c) We are responsible for establishing and maintaining internal controls for financial reporting and that we have evaluated the effectiveness of the internal control systems of the Company pertaining to financial reporting and we have disclosed to the auditors and the Audit Committee, deficiencies in the design or operation of such internal controls, if any, of which we are aware and the steps we have taken or propose to take to rectify these deficiencies. (d) We have indicated to the auditors and the Audit Committee : i. significant changes in internal control during the year; ii. significant changes in accounting policies during the year and that the same have been disclosed in the notes to the financial statements; and iii. instances of significant fraud of which we have become aware and the involvement therein, if any, of the management or an employee having a significant role in the Company s internal control system over financial reporting. Mumbai, 31 st May, 2011 For PCS Technology Ltd. H. C. Tandon M. P. Jain Managing Director & CEO Chif Financial Officer 13

16 PCS TECHNOLOGY LIMITED AUDITORS REPORT To the members of PCS TECHNOLOGY LIMITED for the year ended 31 st March, ) I have audited the attached Balance Sheet of PCS TECHNOLOGY LIMITED, as at 31 st March, 2011 and Profit and Loss Account and the Cash Flow statement of the Company for the year ended on that date annexed thereto. These financial statements are the responsibility of the Company s Management. My responsibility is to express an opinion on these financial statements based on audit. 2) I have conducted audit in accordance with the auditing standards generally accepted in India. These Standards require that I plan and perform the audit to obtain reasonable assurance about whether the financial statements are free from any material misstatement. An audit also includes examining on a test basis, evidence supporting the amounts and disclosures in the financial statements. An audit also includes, assessing the accounting principles used and significant estimates made by management, as well as evaluating the overall presentation of the financial statements. I believe that my audit provides a reasonable basis for my opinion. 3) As required by the Companies (Auditor s Report) Order, 2003 issued by the Central Government in terms of Section 227(4A) of the Companies Act, 1956, and on the basis of such checks of books and records of the Company as I considered necessary and appropriate and according to the information and explanations given to me during the course of the audit, enclose in the Annexure, a Statement on the matters specified in Paragraph 4 & 5 of the said order. 4) Further to my comments in the Annexure referred to in Paragraph 3 above, I report that: a) I have obtained all the information and explanations which to the best of my knowledge and belief were necessary for the purpose of audit. b) In my opinion proper books of accounts as required by Law have been kept by the Company so far as appears from my examination of such books. c) The Balance Sheet, Profit and Loss Account and Cash Flow Statement referred to in this report are in agreement with the books of accounts. d) In my opinion the Balance Sheet, the Profit and Loss Account and the Cash Flow Statement complies with the mandatory Accounting Standards referred to in subsection (3C) of Section 211 of the Companies Act, e) Based on the representations made by the Directors as on 31 st March, 2011 and taken on record by the Board of Directors of the Company and the information and explanations given to me, none of the Director is, as at 31 st March, 2011, primafacie disqualified from being appointed as a director in terms of clause (g) of subsection (1) of Section 274 of the Companies Act, (i) (ii) (iii) f) In my opinion and to the best of my information and according to the explanations given to me, the said accounts give the information required by the Companies Act, 1956, in the manner so required and give a true and fair view in conformity with the accounting principles generally accepted in India : i) In the case of the Balance Sheet, of the state of affairs of the Company as at 31st March, 2011 and ii) In the case of the Profit and Loss Account, of the profit of the Company for the year ended on that date. iii) In the case of the Cash Flow Statement, of the cash flows for the year ended on that date. For S.C. BANDI & CO. Chartered Accountants S.C.BANDI (Proprietor) 31 st May, 2011 Membership no ANNEXURE TO THE AUDITORS REPORT The Company has maintained proper records showing full particulars including quantitative details and situation of Fixed Assets. The assets have been physically verified by the Management during the year and no discrepancies were noticed on such verification. (a) The inventory has been physically verified during the year by the management. In my opinion, the frequency of verification is reasonable. (b) The procedures of physical verification of inventories followed by the management are reasonable and adequate in relation to the size of the Company and the nature of its business. (c) The Company is maintaining proper records of inventory. The discrepancies noticed on verification between the physical stocks and the book records were not material. (a) The Company has not granted any loans, secured or unsecured to companies, firms or other parties covered in the register maintained under Section 301 of the Companies Act, (b) The Company has taken loans from five parties covered in the register maintained under section 301 of the Companies Act, The maximum amount involved during the period was Rs.7,161/ lacs and the balance at the end of the period is Rs.6,323/ lacs (c) In my opinion, the rate of interest and other terms and conditions on which loans have been taken from the companies, firms or other parties listed 14

17 THIRTIETH ANNUAL REPORT in the register maintained under section 301 of the Companies Act, 1956 are, not prima facie, prejudicial to the interest of the Company. (d) There is no stipulation as to the time period for payment of the principal amount of unsecured loans and advances taken. (iv) In my opinion and according to the information and explanations given to me, there are adequate internal control procedures commensurate with the size of the Company and the nature of business with regard to purchases of inventory, fixed asset and with regard to the sale of goods. During the course of my audit, no major weakness has been noticed in internal control system in respect of these areas. (v) (a) In my opinion and according to the information and explanations given to me, the particulars of contracts or arrangements referred to in section 301 of the Act have been entered in the register required to be maintained under that section. (b) In my opinion, and according to the information and explanations given to me, the contracts and arrangements entered in the register maintained under section 301 of the Companies Act, 1956 have been made at prices which are reasonable having regard to the prevailing market price (vi) The Company has not accepted any deposits from the public and hence, the provisions of clause 4 (vi) of the Companies (Auditor s Report) Order 2003 are not applicable to the Company. (vii) In my opinion and according to the information and explanations given to me, there is an adequate internal audit system commensurate with the size of the Company and the nature of its business. (viii) On the basis of the records, I am of the opinion that primafacie the cost records and accounts prescribed by the Central Government under Section 209(1) (d) of the Companies Act 1956 have been made and maintained in respect of the Company s product to which the said rule are made applicable. However, I have not carried out any detailed examination of such accounts and records. (ix) (a) The Company is regular in depositing with appropriate authorities undisputed statutory dues including provident fund, investor education protection fund, employees state insurance, income tax, sales tax, wealth tax, custom duty, excise duty, cess and other material statutory dues applicable to it. (b) According to the information and explanations given to me, no undisputed amounts payable in respect of income tax, wealth tax, sales tax, custom duty, excise duty and cess were in arrears, as at 31 st March, 2011 for a period of more than six months from the date they become payable. (x) The Company has no accumulated losses and has not incurred any cash losses during the financial year covered by my audit or in the immediately preceding financial year. (xi) According to the information and explanations given to me, the Company has not defaulted in repayment of dues to financial institutions or banks. (xii) According to the information and explanations given to me, no loans and advances have been granted by the Company on the basis of security by way of pledge of shares, debentures and other securities and hence the clause (xii) of the said Order relating to maintenance of documents and records are not applicable. (xiii) In my opinion, the Company is not a chit fund or a nidhi/ mutual benefit fund/society. Therefore, the provisions of clause 4(xiii) of the Companies (Auditor s Report) Order, 2003 are not applicable to the Company. (xiv) In my opinion, the Company is not dealing in Shares, Securities and Debentures and hence, the provisions of clause 4(xiv) of the Companies (Auditor s Report) Order, 2003 are not applicable to the Company. (xv) In my opinion and according to the information and explanations given to me, the Company has not given any guarantee for loans taken by others from Banks or Financial institutions. (xvi) The Company has raised new Term loan during the year and the said Term loan was applied for the purpose for which it was obtained. (xvii) According to the information and explanations given to me and on an overall examination of the balance sheet of the Company, I report that no funds raised on shortterm basis have been used for longterm investment. (xviii) During the year, the Company has not made any preferential allotment of shares to parties and companies covered in the register maintained under Section 301 of the Companies Act, (xix) The Company has not issued any Debentures during the financial year covered by my audit. (xx) The Company has not raised any money by way of public issue during the year. (xxi) According to the information and explanations given to me, no fraud on or by the company has been noticed or reported during the course of my audit. For S.C. BANDI & CO. Chartered Accountants S.C.BANDI (Proprietor) 31 st May, 2011 Membership no

18 PCS TECHNOLOGY LIMITED BALANCE SHEET AS AT 31ST MARCH, 2011 PARTICULARS 1) SOURCES OF FUNDS a) SHAREHOLDER'S FUNDS Schedule No i) Share Capital [A] 210,240, ,240, ii) Reserves & Surplus [B] 923,590, ,318,935 1,133,830,649 1,155,559,123 b) LOAN FUNDS i) Secured Loans [C] 259,948, ,199,009 ii) Unsecured Loans [D] 677,833, ,000, ,781, ,199,009 c) DEFERRED TAX LIABILITY (NET) 40,860,000 50,619,000 Total... 2,112,472,009 2,185,377,132 2) APPLICATION OF FUNDS a) FIXED ASSETS Gross Block [E] 910,181,695 1,130,340,727 Less: Depreciation 292,735, ,626,219 Net Block 617,445, ,714,508 Capital work in progress (Including Advances on Capital account) 89,843,797 80,147, ,289, ,862,109 b) INVESTMENTS [F] 65,724,730 65,724,730 c) CURRENT ASSETS, LOANS AND ADVANCES [G] i) Inventories 107,037, ,737,353 ii) Sundry Debtors 1,610,340,082 1,617,184,139 iii) Cash and Bank Balances 109,206,721 94,118,927 iv) Other Current Assets 758,796 3,240,365 v) Loans and Advances 180,474, ,729,827 2,007,817,203 2,008,010,611 LESS: CURRENT LIABILITIES & PROVISIONS [H] i) Current Liabilities 659,367, ,540,780 ii) Provisions 8,992,301 11,679, ,359, ,220,318 NET CURRENT ASSETS 1,339,457,531 1,336,790,293 Total... 2,112,472,009 2,185,377,132 NOTES TO THE ACCOUNTS [I] As per my Report of even date attached For S. C. BANDI & COMPANY Chartered Accountants For and on behalf of the Board of Directors G. K. Patni (Chairman) H.C. Tandon (MD & CEO) S. C. Bandi Proprietor Membership no A. K. Patni (Vice Chairman) B. J. Patel Company Secretary 31 st May, 2011 Mumbai, 31 st May, 2011 G. M. Dave P. V. Mehta Directors K. K. Barjatya 16

19 THIRTIETH ANNUAL REPORT PROFIT AND LOSS ACCOUNT FOR THE YEAR ENDED 31ST MARCH, 2011 PARTICULARS Schedule No. Year ended Period ended INCOME Sales & Services 1,878,950,497 1,977,039,502 Less: Sales Tax 43,843,106 45,356,883 1,835,107,391 1,931,682,619 Less: Central Excise Duty 21,258,755 23,750,955 1,813,848,636 1,907,931,664 Income From Operation [1] 3,735,709 6,046,811 Other Income [1] 31,025,444 4,911,544 34,761,153 10,958,355 1,848,609,789 1,918,890,019 EXPENDITURE Decrease/(Increase) in stocks [2] (1,649,581) (5,801,172) Cost of materials consumed / sold [3] 862,691,309 1,121,778,739 Manufacturing & Other Expenses [4] 857,065, ,907,300 1,718,107,191 1,783,884,867 Less: Cost Capitalised 1,927,695 1,716,179,496 1,783,884,867 Profit before Interest, Depreciation & Taxation 132,430, ,005,152 Interest Paid [5] 73,849,794 62,277,322 Depreciation 59,261,900 50,700,118 Less :Transfer from Revaluation Reserve 10,075,856 7,564,508 49,186,044 43,135,610 Profit before Taxation... 9,394,455 29,592,220 Less: Provision for Taxation Current Tax 12,000,000 7,000,000 Deferred Tax (9,759,000) 2,775,000 2,241,000 9,775,000 Profit for the Year after Taxation 7,153,455 19,817,220 Add: Taxation pertaining to earlier years 715, ,103 Net Profit for the year 7,868,603 20,019,323 Add: Balance as per last Balance Sheet 230,019, ,000,229 Balance of Profit carried over to Balance Sheet ,888, ,019,552 Basic and diluted Earning per Share of Rs.10/ each (in Rupees) As per my Report of even date attached For S. C. BANDI & COMPANY Chartered Accountants For and on behalf of the Board of Directors G. K. Patni (Chairman) H.C. Tandon (MD & CEO) S. C. Bandi Proprietor Membership no A. K. Patni (Vice Chairman) B. J. Patel Company Secretary 31 st May, 2011 Mumbai, 31 st May, 2011 G. M. Dave P. V. Mehta Directors K. K. Barjatya 17

20 PCS TECHNOLOGY LIMITED CASH FLOW STATEMENT FOR THE YEAR ENDED 31ST MARCH, 2011 Particulars Year ended 31st March, 2011 Period ended 31st March, 2010 Cash Flow arising from Operating Activities: Net Profit before Tax 9,394,455 29,592,220 Add: Depreciation 49,186,044 43,135,611 Profit on Sale of Fixed Assets (Net ) (24,194,335) Interest received (5,553,041) (4,516,814) Dividend received (6,700) (44,630) Interest expenses 73,849,794 93,281,762 62,277, ,851,489 Operating Profit before Working Capital changes 102,676, ,443,709 Decrease/(Increase) in Sundry Debtors 22,752,847 (150,801,737) Decrease/(Increase) in Inventories 36,621,973 22,572,447 (Decrease)/Increase in Sundry Creditors (1,117,495) 170,764,998 Cash Generated from Operations.. 58,257,325 42,535,708 Income Tax paid (net of refunds) (19,681,118) (40,332,088) Net Cash Flow from /used Operating Activities ,252, ,647,329 Cash Flow arising from Investing Activities: Purchase of fixed assets (including Capital work in progress & (50,040,450) (113,028,389) capital advances) Proceeds from sale of fixed assets 31,101,953 77,200 Interest received 8,034,610 3,100,396 Dividend received 6,700 44,630 Net Cash from Investing Activities... (10,897,187) (109,806,163) Cash Flow arising from Financing Activities: Repayment of longterm borrowings (net) (175,684,248) (17,155,604) Proceeds from unsecured loan (net) 66,833,333 35,000,000 Change in working capital facilities 67,433,266 12,641,979 Interest paid (73,849,794) (62,277,322) Net Cash used from Financing Activities... (115,267,443) (31,790,947) Net Increase/(Decrease) in Cash/Cash Equivalents... 15,087,794 (8,949,781) Cash and Cash Equivalents at the beginning of the year 94,118, ,068,708 Cash and Cash Equivalents at the end of the year 109,206,721 94,118,927 As per my Report of even date attached For S. C. BANDI & COMPANY Chartered Accountants For and on behalf of the Board of Directors G. K. Patni (Chairman) H.C. Tandon (MD & CEO) S. C. Bandi Proprietor Membership no A. K. Patni (Vice Chairman) B. J. Patel Company Secretary 31 st May, 2011 Mumbai, 31 st May, 2011 G. M. Dave P. V. Mehta Directors K. K. Barjatya 18

21 THIRTIETH ANNUAL REPORT SCHEDULES TO BALANCE SHEET AS AT 31ST MARCH, 2011 PARTICULARS SCHEDULE "A" SHARE CAPITAL AUTHORISED 25,000,000 Equity Shares of Rs.10/ each 250,000, ,000,000 ISSUED, SUBSCRIBED & PAID UP 20,950,677 Equity Shares of Rs.10/each fully paid (Refer note) 209,506, ,506,770 Add : Equity Shares forfeited amounts originally paid up 733, ,418 Note: Issued & Subscribed and Paidup Capital includes Equity Shares issued as Bonus Shares by way of Capitalisation of General reserve. 210,240, ,240,188 Total 210,240, ,240,188 SCHEDULE "B" RESERVES & SURPLUS CAPITAL RESERVE As per last Balance Sheet 7,120,050 7,120,050 SECURITIES PREMIUM ACCOUNT As per last Balance Sheet 196,125, ,125,611 REVALUATION RESERVE As per last Balance Sheet 417,953, ,517,696 Less : Transferred to Profit & Loss a/c On account of depreciation 10,075,856 7,564,508 On sale of fixed assets 19,521, ,356, ,953,188 GENERAL RESERVE 94,100,534 94,100,534 BALANCE IN PROFIT & LOSS ACCOUNT ( As per Annexed Account ) 237,888, ,019,552 Total 923,590, ,318,935 19

22 PCS TECHNOLOGY LIMITED SCHEDULES TO BALANCE SHEET AS AT 31ST MARCH, 2011 PARTICULARS SCHEDULE "C" SECURED LOANS TERM LOANS HDFC Limited 58,406,893 50,000,000 (Secured by hypothecation of property at Mahape) WORKING CAPITAL FACILITIES FROM BANKS i) Cash Credit 78,912, ,672,774 ii) Working Capital Demand Loan 120,617,063 53,183,797 iii) Foreign Currency Loan 158,939,989 (Secured against hypothecation of Inventories and 199,529, ,796,560 Book Debts of the Company as well as second charge on the fixed assets of the Company) OTHER LOANS Against hypothecation of Vehicles i) HDFC Bank Limited 236, ,449 ii) Axis Bank Limited 1,774,839 2,011, ,449 Total 259,948, ,199,009 SCHEDULE "D" UNSECURED LOANS From Bank 45,833,333 From Directors 559,500, ,500,000 Intercorporate Deposits 72,500,000 72,500,000 Total 677,833, ,000,000 SCHEDULE " E" FIXED ASSETS (Rupees) S. NO. PARTICULARS 01/04/2010 GROSS BLOCK DEPRECIATION NET BLOCK Addition Deduction 31/03/ /04/2010 For the year Deduction 31/03/ /03/ /03/ Freehold Land 80,403,834 17,193,834 63,210,000 63,210,000 80,403,834 2 Lease hold Land 200,609, ,609,904 3,108,479 3,657,250 6,765, ,844, ,501,426 3 Building 217,001,608 23,107,947 4,277, ,831,675 48,209,772 9,345, ,260 57,319, ,512, ,791,837 4 Plant and Machinery 278,305, ,385,775 91,919, ,145,764 3,929, ,064,696 79,010,119 12,909,360 21,159,490 5 Tools & Testing equipments 8,439,735 5,464,842 13,904,577 4,273, ,018 4,762,384 9,142,193 4,166,369 6 Electrical Installation 9,569,516 2,093,376 11,662,892 6,145, ,381 6,591,011 5,071,881 3,423,887 7 Furniture and Fixture 33,795, ,389 1,669,934 32,880,476 15,669,916 1,793, ,508 16,464,220 16,416,256 18,125,105 8 Vehicles 9,200,021 3,401, ,590 12,231,091 3,151,459 1,004, ,423 3,971,982 8,259,109 6,048,562 9 Computers, office & other equipments 10 Software ( Intangible assets) 145,237,094 4,931,599 50,605,272 99,563,421 41,476,014 15,282,817 10,667,487 46,091,344 53,472, ,761, ,778, , ,368,180 48,445,819 23,314,056 71,759,875 76,608,305 99,332,921 TOTAL 1,130,340,727 40,344, ,503, ,181, ,626,219 59,261, ,152, ,735, ,445, ,714,508 Total Previous year. 1,092,527,421 39,290,502 1,477,196 1,130,340, ,243,564 50,700, , ,626, ,714, ,283,856 20

23 THIRTIETH ANNUAL REPORT SCHEDULES TO BALANCE SHEET AS AT 31ST MARCH, 2011 PARTICULARS Nos. of Units/ Shares Face Value Nos. of Units/ Shares Face Value SCHEDULE F INVESTMENTS (Long term, At cost, Nontrade, Unless otherwise Stated) (a) Quoted Investments i) Fully paid up equity shares Longview Tea Ltd , ,000 Chennai Petroleum Corpn. 1, ,000 1, ,000 NEPC Micon Ltd , ,000 Asit C Mehta Financial Services Ltd 5, ,000 5, ,000 Riga Sugar Co Ltd 2, ,000 2, ,000 Western India Industries Ltd 7, ,000 7, , , ,000 ii) Fully paid up units of Mutual Fund Master Shares of UTI 14, ,430 14, , , ,430 Less: Provision for Dimnution in value of Investments (b) Unquoted Investments i) Government Securities 475, , , ,430 National Saving Certificates , ,000 ii) Fully paidup Equity Shares A) In Subsidiary companies PCS International Ltd., Mauritius 111,000 USD ,088, ,000 USD ,088,450 PCS Technology USA, Inc. 2,500 USD ,850 2,500 USD ,850 PCS Positioning Systems (India) Limited 1,750,000 INR ,500,000 1,750,000 INR ,500,000 B) In Others Saraswat Coop. Bank Ltd 1, ,000 1, ,000 Kalpavruksh Systems Limited 50, ,000 50, ,000 65,320,300 65,320,300 65,724,730 65,724,730 Book value of Quoted investment 404, ,430 Book value of Unquoted investment 65,320,300 65,320,300 Market value of Quoted investment 1,215,100 1,767,520 PARTICULARS SCHEDULE G CURRENT ASSETS, LOANS AND ADVANCES INVENTORIES (Valued at cost or net realisable value which ever is lower and as certified by the Management) Raw Materials,Computer Accessories & Spares 94,432,081 92,781,563 Work in Progress 12,605,371 10,955, ,037, ,737,353 21

24 PCS TECHNOLOGY LIMITED SCHEDULES TO BALANCE SHEET AS AT 31ST MARCH, 2011 PARTICULARS SUNDRY DEBTORS (Unsecured & considered good by the Management) i) Over six months 877,349, ,538,252 ii) Other debts 622,780, ,219,836 iii) Future finance lease receivables 4,962,935 15,808,415 iv) Revenue accrued not billed 105,247,712 79,617,636 1,610,340,082 1,617,184,139 (includes Rs. 12,967,074 / due from PCS International Ltd.,wholly owned subsidiary previous year: Rs.9,515,227/. Maximum balance outstanding Rs.17,678,042/, previous year : Rs.9,650,987/) (includes Rs. 5,236,845/ due from PCS Technology. USA, wholly owned subsidiary previous year :Rs.4,997,900/. Maximum balance outstanding Rs.5,236,845/, previous year : Rs.4,997,900/) (includes Rs. 11,685,851/ due from PCS Positioning Systems (India) Limited, subsidiary company previous year :Rs.11,764,895/. Maximum balance outstanding Rs.11,764,895/, previous year : Rs. 11,764,895/) CASH AND BANK BALANCES Cash in hand 11,209,594 11,611,707 Bank Balances i) In Current Account 60,612,463 32,529,315 ii) In Margin Money Deposits 37,384,664 49,977, ,206,721 94,118,927 OTHER CURRENT ASSETS Interest accrued 758,796 3,240,365 LOANS & ADVANCES (Unsecured & considered good by the Management) Advances recoverable in cash 63,887,237 68,083,107 or in kind or for value to be received Loans & Advances to Subsidiaries PCS Positioning System (India) Ltd 1,167,415 (Maximum balance outstanding Rs. 1,167,415/, previous year Rs. 1,167,415 /) Earnest Money Deposits 21,444,358 27,726,248 Sundry Deposits 28,241,104 29,720,316 (Amount includes Rs. 39 lacs paid to relatives of Director on account of rental deposits, Previous year Rs.38 lacs) Advance payment of Income Tax (Net of Provision) 64,426,946 57,773,831 Balance with Central Excise Department 2,474,507 5,258, ,474, ,729,827 Total 2,007,817,203 2,008,010,611 SCHEDULE "H" CURRENT LIABILITIES AND PROVISIONS CURRENT LIABILITIES Sundry Creditors Micro and Small Enterprises 8,843,709 3,660,028 Sundry Creditors Others 461,257, ,688,709 Advance from Customers 8,939,756 18,018,130 Advance against sale of property 159,000,000 Income received in advance 3,890,873 30,013,743 Other Current Liabilities 17,435,909 17,160, ,367, ,540,780 PROVISIONS For Fringe Benefit Tax (Net of advances) 1,556,210 3,299,361 For Leave Encashment 7,436,091 8,380,177 8,992,301 11,679,538 Total 668,359, ,220,318 22

25 THIRTIETH ANNUAL REPORT SCHEDULES TO PROFIT & LOSS ACCOUNT FOR THE YEAR ENDED 31st MARCH 2011 PARTICULARS Year ended Period ended SCHEDULE "1" INCOME FROM OPERATIONS & OTHER INCOME INCOME FROM OPERATION Sale of Scrap etc. 217, ,170 Foreign Exchange fluctuation (Gain) 657,658 Commission received 26,640 Finance Charges Lease 3,149,008 4,281,838 Incentive from Suppliers 369, ,505 3,735,709 6,046,811 OTHER INCOME Profit on Sale of Fixed assets (net) 1,408,567 33,663 Add: Transfer from Revaluation Reserve 22,785,768 24,194,335 33,663 Dividend received i) On long term Investments 6,700 44,630 6,700 44,630 Interest received i) From Banks 359,820 3,294,580 ii) From Income tax refund 5,008, ,186 iii) From Others 185,163 5,553, ,048 4,516,814 (Tax deducted at source Rs. 192,190/ previous year Rs 392,750/) Sundry Balances written back 224,285 Miscellaneous Income 1,047, ,437 31,025,444 4,911,544 Total 34,761,153 10,958,355 SCHEDULE "2" DECREASE/(INCREASE) IN VALUE OF STOCK Opening stock as on 1st April 2010 i) Work in Progress 10,955,790 4,349,302 ii) Finished Goods 834,869 10,955,790 5,184,171 Less: Closing Stock as at 31st March, 2011 Work in Progress 12,605,371 10,955,790 12,605,371 10,955,790 (1,649,581) (5,771,619) Add:Increase /(Decrease) in Excise duty on stocks Excise duty in Opening stock (29,553) Excise duty in Closing stock (29,553) Total (1,649,581) (5,801,172) 23

26 PCS TECHNOLOGY LIMITED SCHEDULES TO PROFIT & LOSS ACCOUNT FOR THE YEAR ENDED 31st MARCH 2011 PARTICULARS Year ended SCHEDULE "3" COST OF MATERIAL CONSUMED / SOLD Opening stock 92,781, ,125,630 Add : Purchases (including decapitalization of 399 lacs) 864,341,827 1,093,434, ,123,390 1,214,560,302 Period ended Less: Closing Stock 94,432,081 92,781, ,691,309 1,121,778,739 Total 862,691,309 1,121,778,739 SCHEDULE "4" MANUFACTURING AND OTHER EXPENSES Salaries, Wages and Bonus 555,846, ,377,252 Gratuity to Staff 48,162 Contribution to EPF, ESIC & EDLIS 34,984,838 24,192,114 Staff Welfare 7,482,746 7,052,195 Consumable,Stores, Spares 32,304,421 19,412,238 Rent 10,913,578 11,608,130 Electricity & Power 4,943,311 5,290,215 Insurance 2,219,447 4,158,171 Payment to Auditors Audit fees 412, ,053 Other services 193,025 77,210 Tax Audit fees 55, ,525 55, ,413 Advertisement & Sales promotion 3,782,427 1,790,481 Bank charges 18,084,193 20,419,708 Bad Debts and Remissions 22,198,799 27,283,148 Sitting fees to directors 490, ,000 Commission on Sales 25, ,679 Legal & Professional fees 10,504,910 10,698,490 Foreign Exchange Fluctuation Loss (Net) 4,293,051 Miscellaneous Expenditure 16,721,622 18,639,212 Packing, Courier & Forwarding 16,635,449 13,884,640 Postage,Telephone & Telex 5,932,976 4,907,241 Printing & Stationery 4,310,105 7,457,462 Rates & Taxes 1,133,947 1,092,570 Repairs to Building 425, ,059 Sales & Work contract tax 9,393,075 4,410,331 Subcontracting charges paid 39,460,549 30,617,931 Travelling & Conveyance 54,318,081 46,636,458 Total 857,065, ,907,300 SCHEDULE "5" INTEREST PAID Interest paid on Fixed Loan 6,619,287 3,894,798 Interest paid to Others 67,230,507 58,382,524 Total 73,849,794 62,277,322 24

27 THIRTIETH ANNUAL REPORT NOTES FORMING PART OF THE ACCOUNTS SCHEDULE I : NOTES TO ACCOUNTS 1. SIGNIFICANT ACCOUNTING POLICIES: (A) BASIS OF PREPARATION: The financial statements of the Company are prepared under the historical cost convention, except for revaluation of certain fixed assets, and are in accordance with the applicable mandatory Accounting Standards and provisions of the Companies Act, (B) FIXED ASSETS: (C) (D) (E) (F) (G) (H) (i) Fixed Assets other than mentioned in item no.(ii) and (iii) below, are stated at cost of acquisition or construction, including any cost attributable to bringing the assets to their working condition for their intended use less accumulated depreciation. Preoperative expenses capitalized forms part of the cost of assets. (ii) On 1 st January 1995, the Company had revalued some of its immovable properties on the basis of a report of Government approved valuer. Consequently, increase in value of Rs.126,947,419/ was transferred to the Revaluation Reserve Account. (iii) On 30 th June, 2009, the Company has revalued Land and Buildings on the basis of a report of Government approved valuer. Consequently, increase in value of Rs.346,935,169/ was transferred to the Revaluation Reserve Account. DEPRECIATION: (i) Revalued assets: Depreciation is provided on the revalued amount at the rates calculated as per straight line method over the residual life of revalued assets, as certified by the Government approved valuer. The difference between depreciation provided on revalued amount and on historical cost is transferred from Revaluation Reserve to Profit and Loss Account. (ii) Assets carried at historical cost: At the rates and in the manner as specified in Schedule XIV to the Companies Act, Individual items of Fixed Assets added during the year costing upto Rs 5,000 each are fully depreciated in the first year. IMPAIRMENT OF ASSETS: An asset is treated as impaired when the carrying cost of assets exceeds its recoverable value. An impairment loss is charged to Profit & Loss account in the year in which an asset is identified as impaired. The impairment loss recognized in prior accounting period is reversed if there has been a change in the estimate of recoverable amount. INVESTMENTS: Longterm investments are carried at cost. Provision for diminution is made to recognize a decline, other than temporary in value of longterm investments. Current investments are carried at lower of cost and fair value. REVENUE RECOGNITION: Revenue from sale of products is recognized when risk and reward are passed on to the customer which is generally on dispatch of goods. Revenues from product sales are exclusive of excise duty and sales tax. Income from services is recognized for the work done in terms of the contract. Income from maintenance contracts is recognized on a time proportionate basis. INVENTORIES: Inventories are valued at cost or net realizable value, whichever is lower. Cost is determined using weighted average method. Finished goods and stock in workinprogress includes proportionate overheads. Finished goods are valued inclusive of duty payable thereon. BORROWING COSTS: Borrowing costs that are directly attributable to the acquisition, construction or production of a qualifying asset are capitalized as part of cost of such asset till such time as the asset is ready for its intended use or sale. All other borrowing costs are recognized as an expense in the period in which they are incurred. (I) EMPLOYEES BENEFITS: Short term employee benefits are recognized as an expense at the undiscounted amount in the profit and loss account of the year in which the related service is rendered. Company s contribution towards Provident and Pension funds visàvis defined contribution plan paid/payable during the year are charged to Profit and Loss account. Post employment benefits in the form of Gratuity and Leave encashment are recognized as expense in the Profit and Loss account at present value of the amounts payable determined on the basis of actuarial valuation technique, using the projected unit credit method. Actuarial gains and losses are recognized in the Profit and Loss Account. (J) FOREIGN CURRENCY TRANSACTIONS: (i) Transactions in foreign currencies are recorded at the exchange rates prevailing on the date of the transaction. Foreign currency monetary assets and liabilities are translated at year end exchange rates. Exchange difference arising on settlement of transactions and translation of monetary items are recognized as income or expenses in the year in which they arise. (ii) In respect of forward exchange contracts, the difference between the forward rate and the exchange rate at the inception of the contract is recognized as income or expenses over the period of the contract. (K) FINANCE LEASE ACCOUNTING: Assets given under finance lease are recognized as receivable at an amount equal to the net investment in the lease. Lease rentals are apportioned between principal and interest on the basis of internal rate of return. The principal amount is reduced from the net investment in the lease, while Finance charges are recognized as revenue. (L) TAXES ON INCOME: Income tax expenses comprise current tax and deferred tax charges or release. Deferred tax is recognized on timing difference subject to consideration and prudence, being the difference between taxable incomes and accounting income that originate in one period and are capable of reversal in one or more subsequent period. (M) PROVISIONS, CONTINGENT LIABILITIES AND CONTINGENT ASSETS: Provisions involving substantial degree of estimation in measurement are recognized when there is present obligation as a result of past events and it is probable that there will be outflow of resources. Contingent Liabilities are not recognized but are disclosed in the Notes. Contingent Assets are neither recognized nor disclosed in the financial statements. 2. The current accounting year is for 12 months from to Figures of previous period are of 9 months from to and hence not directly comparable with figures of current year. The figures of the previous period have been regrouped and/or rearranged wherever necessary. 3. In the opinion of the Board of Directors, the Current Assets, Loans and Advances are approximately of the values stated, if realized in the ordinary course of business. The provisions for depreciation and known liabilities are adequate and not in excess of the amounts reasonably necessary. 4. COMMITMENTS AND CONTINGENT LIABILITIES (a) Commitments Estimated amount of contracts remaining to be executed on capital account and not provided for is NIL (previous year Rs 3,46,950/), net of advances. (b) Contingent Liabilities not provided. i) On account of Bank guarantees Rs. 243,422,580/ (Previous year Rs.434,340,612/). 25

28 PCS TECHNOLOGY LIMITED NOTES FORMING PART OF THE ACCOUNTS (Contd.) 5. Managerial Remuneration to the Managing Director (Rupees) Managing Director Current Year ended Previous Period ended (a) Salaries 2,008,500 1,408,500 (b) Value of perquisites 21,600 16,200 (c) Provident fund 201, ,200 (d) Exgratia 8,400 6,300 Total Remuneration 2,240,100 1,582, EMPLOYEE BENEFITS a) Contribution to provident Fund of Rs.18,668,451/ (previous year Rs. 14,454,121/) is recognized as an expense and included in contribution to provident funds and other funds in the Profit and loss Account. b) Defined Benefit plans in respect of Gratuity and leave encashment as per actuarial valuation (Rupees) Current Year Previous Period Particulars Gratuity (Funded) Leave encashment (Non funded) Gratuity (Funded) Leave encashment (Non funded) 1. Change in benefit obligation Liability at the beginning of the year 14,270,365 8,380,177 14,225,384 7,898,478 Interest cost 1,141, , , ,695 Current service cost 2,575,009 2,515,651 2,263,189 2,183,973 Past service cost(vested benefits) 2,994,435 Benefit paid Actuarial (Gain)/ Loss (4,249,366) (4,130,151) (3,019,117) (2,146,969) Liability at the end of the year 16,732,072 7,436,091 14,270,365 8,380, Change in Fair value of Plan Assets Fair value of Plan assets at the 17,107,596 16,942,885 beginning of year Adjustments to opening balance (1,379) Expected Return on Plan assets 2,052, ,848 Contributions Benefit paid Actuarial (Gain)/ Loss on plan (1,848,908) (742,137) assets Fair value of Plan assets at the end of year 17,310,055 17,107, Expenses recognized in the Profit & Loss a/c Current service cost 2,515,651 2,183,973 Interest cost 670, ,695 Expected Return on Plan assets Actuarial (Gain)/ Loss (4,130,151) (2,146,969) Expenses recognized in the Profit & Loss a/c (944,086) 481, Actuarial Assumptions Discount rate 8.00% 8.00% Salary escalation rate 5% 5% Expected Return on Plan assets 12.00% 7.13% Retirement age 58 Years 58 Years Mortality LIC (199496) LIC (199496) The estimate of future salary increase, considered in actuarial valuation, take into account inflation, seniority, promotion and other relevant factors such as supply and demand in the employment market. 7. The Legal and Professional fees includes payments of professional fees of Rs.796,070/ (previous year Rs. 496,350/) to the firms in which some of the Directors of the Company are partners. 8. Interest capitalized on account of Borrowing costs for the year ended 31 st March 2011 is Rs.6,281,273/ 9. Particulars of dues to Micro, Small and Medium Enterprises under Micro, Small and Medium Enterprises Development Act, 2006 (MSMED Act) (Rupees) Particulars 31 st March, st March, 2010 Principle amount due to suppliers under MSMED 8,843,709 3,660,028 Act at the year end Interest accrued & due to suppliers under 4,159 11,633 MSMED Act on the above amount, unpaid at the year end Payment made to suppliers (other than interest) 624, ,056 beyond the appointed day during the year Interest paid to suppliers under MSMED Act Nil Nil during the year Interest due & payable to suppliers under 11,900 4,809 MSMED Act for payments already made. Interest accrued & remaining unpaid at the end of the year to supplier under MSMED Act. 16,059 16, The Pune unit continues to manufacture Computer Systems while manufacturing of Copper Clad Laminates (CCL) remains suspended. 11. Additional information pursuant to the provisions of Paragraphs 3 & 4 of part II of Schedule VI of the Companies Act, 1956 are as under: Particulars in respect of goods manufactured, licensed capacity, installed capacity and production. S.No. Particulars Current Year Ended (A) Licensed / Installed Capacity Previous Period Ended (i) Computer Division Licensed capacity Not applicable Not applicable Installed capacity Not ascertainable Not ascertainable (ii) CCL Division Licensed capacity Glass Epoxy Copper Clad Laminates Not applicable 3 lacs Sq.mtrs.p.a Paper phenolic & Composite Copper Not applicable 5 lacs Sq.mtrs.p.a clad Laminates Installed capacity Glass Epoxy Copper Clad Laminates Not applicable 3 lacs Sq.mtrs.p.a Paper phenolic & Composite Copper clad Laminates Not applicable 5 lacs Sq.mtrs.p.a (B) Production Computer Division Opening Stock 11 Nos. 42 Nos. Production during the year 5705 Nos. 9,520 Nos. Capitalized 0 Nos. 0 Nos. Closing Stock 0 Nos. 11 Nos. (C) Turnover (i) Computer Division Rs. Rs. Sales Including Computers, Computer 1,813,848,636 1,907,931,664 Components, Monitors, Printers, Power Supply, Services & others. (Mixed Items) TOTAL 1,813,848,636 1,907,931,664 26

29 THIRTIETH ANNUAL REPORT NOTES FORMING PART OF THE ACCOUNTS (Contd.) (E) (F) (G) S.No. Particulars Current Year Ended (D) Material Consumption (Consumption has been arrived at by deducting closing stock from the total of Opening Stock and Purchase Previous Period Ended (i) Computer Division Rs. Rs. In view of considerable items, diverse 862,691,309 1,121,778,739 in size and nature, and the fact that no item of Raw Material and component exceeds 10% of total value of consumption, it is not practicable to furnish quantitative information of Raw Material and component consumes. TOTAL 862,691,309 1,121,778,739 Value of imported and indigenous Raw Materials, Computer Accessories consumed and percentage there of: Rs. % Rs. % Raw Material, Computers & Peripherals Accessories (i) Imported 69,508, ,235, (ii) Indigenous 793,182, ,013,543, Value of imported on CIF basis in respect of: 862,691, ,121,778, Current Year (Rupees) Previous Period (Rupees) Raw Material, Computers & Peripherals Accessories 72,181, ,793,276 Expenditure in foreign currency: Travelling & Others 21,848,660 17,792,411 (H) Earning in foreign currency: (F.O.B. Value of Exports) Export Sales & Services 39,719,681 73,241, Finance Lease Accounting: In certain cases, the company has sold its product by way of lease arrangements with the customers. The transaction is treated as finance lease in accordance with Accounting Standard 19. The details of lease transactions as on 31 st March 2011, is as follows S. No. Particulars Rs Rs. a) Gross Investment in lease 5,112,495 16,592,143 b) Present value of minimum lease payment 4,962,934 15,808,414 c) Total gross investment 1) Not later than one year 3,167,904 11,703,112 2) later than one year but not later than five 1,944,591 4,889,031 3) later than five year d) Present value of Minimum lease payment 1) Not later than one year 3,207,722 10,845,480 2) later than one year but not later than five 1,755,212 4,962,934 3) later than five year e) Unearned Finance income 149, , Particulars of Earnings per Shares: S. Particulars No. a) Net Profit for the year 7,868,603 20,019,324 b) Number of equity shares outstanding at the beginning and at the end of the year 20,950,677 20,950,677 c) Nominal Value of the shares d) Basic and diluted Earning per share (Rs. (a / b) Deferred Tax: a) Deferred tax has been provided in accordance with Accounting Standard 22 Accounting for Taxes on income. b) The break up of net deferred tax liability is as under: (Rupees) S. No. Particulars Accumulated Accumulated as at A) Deferred Tax Liability i) Depreciation 43,290,000 51,561,000 B) Deferred Tax Assets i) Expenses allowable on payment basis 2,430, ,000 Net Deferred Tax Liability 40,860,000 50,619, Related parties disclosures: A. Names of the related parties (where control exists) Subsidiary Companies: i PCS International Ltd., Mauritius ii PCS Technology USA, Inc iii PCS Positioning Systems (India) Ltd. B. Other Related parties with whom there are transactions during the year a) Key Management Personnel i) Mr. G.K.Patni (Chairman) ii) Mr. A.K.Patni (Vice Chairman) iii) Mr. H C Tandon (Managing Director) b) Relatives of key management personnel: i) Mrs. Rajnikanta Patni (Wife of Mr. G.K.Patni) ii) Mrs. Sadhna Patni (Wife of Mr. A.K.Patni) iii) Mr. Apoorva Patni (Director) (Son of Mr. A.K.Patni) iv) Mr. Arihant Patni (Son of Mr. G.K.Patni) v) Mrs. Rajrani Gangwal (Sister of A.K.Patni & G.K.Patni) vi) Sobhagmal M.Patni HUF (Mr.G.K.Patni & Mr.A.K.Patni are members of HUF) vii) Estate of Late Sobhagmal M Patni viii) Estate of Late Mrs. Kanchanbai Patni c) Affiliates (Enterprises over which Key Management personnel or relatives have significant influence) i) Ashoka Computer Systems Pvt Ltd ii) PCS Cullinet Pvt Ltd iii) PCS Finance Pvt Ltd. iv) Kalpavruksh Systems Ltd (Formerly known as Vraksh Technologies Ltd) v) Saulese Energija Ltd 27

30 PCS TECHNOLOGY LIMITED NOTES FORMING PART OF THE ACCOUNTS (Contd.) 15.2) Transactions carried out with related parties referred in 1 above,in ordinay course of business. Description Subsidiaries Companies Key Management Personnel Relative of key Management Personnel Sales of Goods and Services 15,335,135 (5,340,743) Interest Paid 673,973 Rent Paid 200,000 (3,014,172) Reimbursement of expenses paid 572,303 (463,249) Rent Received Recovery of expenses received 155,125 (77,275) Advance given now received 1,167,415 Loan taken 65,000,000 (35,000,000) Loan Refunded 44,000,000 (50,000,000) Advance received against sale of Property 159,000,000 Remuneration to Directors 2,240,100 (1,582,200) Property Deposit Paid 100,000 Balance outstanding as on 31st March 2011 Receivable 29,874,582 (26,278,024) Property Deposits 3,900,000 (3,800,000) Other Loan Taken 559,500,000 (538,500,000) Advance received against sale of Property 159,000,000 Advance Rent received Advance given (1,167,415) (Note: Previous years figures are shown in brackets) 15.3) Details of Significant Transactions carried out with related parties referred above,in ordinary course of business. Description Subsidiaries Companies Sales of goods and services PCS International Ltd., Mauritus 15,335,135 (5,340,743) Kalpavruksh Systems Ltd Interest paid A.K.Patni Ashoka Computer Systems Pvt. Ltd. PCS Finance Pvt. Ltd. PCS Cullinet Pvt. Ltd. Key Management Personnel 673,973 Affiliates 28,826,068 (4,300) 5,375,000 (3,695,206) (435,600) (51,159) 3,300,000 (2,250,000) 1,924,496 (2,191,528) (55,000,000) (5,000,000) 5,309,099 (2,004,126) 406,700 (406,700) 72,500,000 (72,500,000) (5,750,000) Relative of key Management Personnel (Rupees) Total 44,161,203 (5,345,043) 6,048,973 (3,695,206) 200,000 (3,449,772) 572,303 (514,408) 3,300,000 (2,250,000) 2,079,621 (2,268,803) 1,167,415 65,000,000 (90,000,000) 44,000,000 (55,000,000) 159,000,000 2,240,100 (1,582,200) 100,000 35,183,681 (28,282,150) 4,306,700 (4,206,700) 632,000,000 (611,000,000) 159,000,000 (5,750,000) (1,167,415) (Rupees) Affiliates 28,776,068 (4,300) 1,812,500 (1,245,120) 1,750,000 (1,204,966) 1,812,500 (1,245,120) 28

31 THIRTIETH ANNUAL REPORT NOTES FORMING PART OF THE ACCOUNTS (Contd.) Description Subsidiaries Companies Rent paid Apoorva Patni Estate of Kanchanbai Patni Sadhana Patni Rajnikanta Patni PCS Finance Pvt. Ltd. Reimbursement of expenses paid PCS International Ltd., Mauritus 572,303 (463,249) Kalpavruksh Systems Ltd. Rent Received Kalpavruksh Systems Ltd. Reimbursement/Recovery of expenses received Kalpavruksh Systems Ltd. Refund of Advance Given PCS Positioning Systems (India) Ltd. 1,167,415 Loan Taken A.K.Patni Ashoka Computer Systems Pvt. Ltd. Key Management Personnel Relative of key Management Personnel 200,000 (698,040) (512,460) (403,560) 65,000,000 (35,000,000) PCS Finance Pvt. Ltd. PCS Cullinet Pvt. Ltd. Loan Refunded A.K.Patni 44,000,000 (50,000,000) Remuneration to Directors H.C.Tandon Advance received against sale of Property Balance outstanding as on 31st March 2011 Receivable PCS Technology USA. INC 5,236,844 (4,997,901) PCS Positioning Systems (India) Ltd. 11,685,851 (11,764,895) PCS International Ltd., Mauritus 12,951,887 (9,515,228) Kalpavruksh Systems Ltd. Property Deposits Estate of Kanchanbai Patni Rajnikanta Patni 2,240,100 (1,582,200) 159,000,000 1,100,000 (1,100,000) 600,000 (600,000) (Rupees) Affiliates (217,800) (51,159) 3,300,000 (2,250,000) 1,924,496 (2,191,528) (17,000,000) (16,000,000) (17,000,000) 5,184,697 (1,879,724) 29

32 PCS TECHNOLOGY LIMITED NOTES FORMING PART OF THE ACCOUNTS (Contd.) Description Subsidiaries Companies Key Management Personnel Relative of key Management Personnel 700,000 (700,000) 600,000 (500,000) 500,000 (500,000) (Rupees) Affiliates Sadhana Patni Apoorva Patni Arihant Patni PCS Finance Pvt. Ltd. 205,030 (205,030) Loan Taken A.K.Patni 349,500,000 (328,500,000) G.K..Patni 210,000,000 (210,000,000) Ashoka Computer Systems Pvt. Ltd. 24,500,000 (24,500,000) PCS Finance Pvt. Ltd. 23,500,000 (23,500,000) PCS Cullinet Pvt. Ltd. 24,500,000 (24,500,000) Advance received against sale of Property A.K.Patni 159,000,000 Advance Rent received Kalpavruksh Systems Ltd (5,750,000) Advance Given PCS Positioning Systems (India) Limited (1,167,415) (Note: Previous years figures are shown in brackets) 16 (a) Disclosure required by Clause 32 of the Listing Agreement. Amount of loans and advances in nature of loans outstanding from subsidiaries Name of the company Relationship Balance as at the end of the year Maximum Outstanding Current year Previous year Current year Previous year PCS Positioning Systems (India) Ltd % Subsidiary 1,167,415 1,167, (b) Details of Investment by the Loanee in the shares of the company. None of the Loanee have made investments in the shares of the company. 17. The Company is engaged mainly in Computer products and services viz., manufacture & trading of computers, peripherals, computer parts and maintenance of computers & related services and as such it is the only reportable business segment. The export sales of the company are less than 10% of the total turnover and hence there is single reportable geographical segment. 18. Balance Sheet abstract and Company s general business profile pursuance to Para IV of Schedule VI to the Companies Act, 1956 is attached. As per my Report of even date attached For S. C. BANDI & COMPANY Chartered Accountants For and on behalf of the Board of Directors G. K. Patni (Chairman) H.C. Tandon (MD & CEO) S. C. Bandi Proprietor Membership no A. K. Patni (Vice Chairman) B. J. Patel Company Secretary 31 st May, 2011 Mumbai, 31 st May, 2011 G. M. Dave P. V. Mehta Directors K. K. Barjatya 30

33 THIRTIETH ANNUAL REPORT NOTES FORMING PART OF THE ACCOUNTS (Contd.) BALANCE SHEET ABSTRACT AND COMPANY'S GENERAL BUSINESS PROFILE I. Registration Details : II. III. IV. Registration No State Code 11 Balance Sheet Date 31st March 2011 Capital raised during the year: (Amount in Rs. Thousands) Public Issue Nil Right Issue Nil Bonus Issue Nil Private Placement Nil Position of Mobilisation and Deployment of Funds: (Amount in Rs. Thousands) Total Liabilities Total Assets Source of Funds Paidup Capital Reserves & Surplus Secured Loans Unsecured Loans Net Deferred Tax Liabilities Application of Funds Net Fixed Assets Investments Net Current Assets Miscellaneous Expenditure Performance of the Company (Amount in Rs. Thousands) Turnover (including Other Income) Total Expenditure Profit before Tax 9395 Profit after Tax 7869 Earnings per Share 0.38 Dividend Rate V. Generic Names of Three Principal Products of the Company Item Code No.(ITC Code) Product Description : Mini/Micro Computer Systems Glass Epoxy Copper Clad Laminates As per my Report of even date attached For S. C. BANDI & COMPANY Chartered Accountants For and on behalf of the Board of Directors G. K. Patni (Chairman) H.C. Tandon (MD & CEO) S. C. Bandi Proprietor Membership no A. K. Patni (Vice Chairman) B. J. Patel Company Secretary 31 st May, 2011 Mumbai, 31 st May, 2011 G. M. Dave P. V. Mehta Directors K. K. Barjatya STATEMENT PURSUANT TO SECTION 212 OF THE COMPANIES ACT,1956 RELATING TO SUBSIDIARY COMPANIES. PARTICULARS PCS International Ltd., Mauritius PCS Technology USA, Inc PCS Positioning Systems (India) Ltd. Financial year ending of the subsidiary 31st March st March st March 2011 No.of Equity shares held by PCS TECHNOLOGY LTD. 111,000 Equity shares of USD 10 each fully paidup 2,500 Equity shares of USD 2 each fully paidup 17,50,000 Equity shares of Rs 10 each fully paidup Extent of Interest of PCS TECHNOLOGY LTD. 100% 100% 99.43% Net aggregate amount of the profit/(losses) of the Subsidiaries so far it concerns the members of PCS TECHNOLOGY LTD as it is not dealt with the Company's Accounts. i) For the current Financial year ended 31st March 2011 (696,828) INR (457,483) INR (1,265,206) INR ii) For the previous Financial period ended since it became a Subsidiary (1,678,348) INR (105,638) INR (2,090,833) INR Net aggregate amount of the profit/(losses) of the Subsidiaries so far as dealt with or provision is made for those losses in the Accounts of PCS TECHNOLOGY LTD. i) For the financial year ended 31st March 2011 Nil Nil Nil ii) For the previous financial period since it became a Subsidiary. Nil Nil Nil As per my Report of even date attached For S. C. BANDI & COMPANY Chartered Accountants For and on behalf of the Board of Directors G. K. Patni (Chairman) H.C. Tandon (MD & CEO) S. C. Bandi Proprietor Membership no A. K. Patni (Vice Chairman) B. J. Patel Company Secretary 31 st May, 2011 Mumbai, 31 st May, 2011 G. M. Dave P. V. Mehta Directors K. K. Barjatya 31

34 PCS POSITIONING SYSTEMS (INDIA) LIMITED MANAGEMENT & ADMINISTRATION DIRECTORS: H. C. Tandon Yash Bhardwaj A. K. Patni D. B. Maheshwari M. P. Jain REGISTERED OFFICE : S. No. 1A, F1, Irani Market, Compound Yerawada, Pune DIRECTORS REPORT To, The Members, PCS POSITIONING SYSTEMS (INDIA) LIMITED Your Directors have the pleasure in presenting their Seventh Annual Report together with Audited Accounts for the year ended 31st March FINANCIAL RESULTS (Rs in lacs) Particulars (12 Months) Year Ended (9 Months) Period Ended Sales & other Income Profit / (Loss) before interest, depreciation & taxation (3) (6) Interest Depreciation 9 15 Profit/(Loss) before Taxation (12) (21) Profit/(Loss) after Taxation (12) (21) Profit/(Loss) as per last Balance sheet (450) (429) Balance Carried to Balance Sheet (462) (450) OPERATIONS During the year under review, your Company has not carried out any business activity; however the Company is exploring the possibility for the revival of the existing line of business. DIVIDEND Your Directors do not recommend any dividend in view of losses incurred during the year. DIRECTORS As per Article 135 of the Articles of Association of the Company, Mr. H C Tandon and Mr. Yash Bharadwaj, retire by rotation and being eligible for appointment, offer themselves for reappointment. DIRECTORS RESPONSIBILITY STATEMENT Pursuant to subsection (2AA) of Section 217 of the Companies Act, 1956, the Board of Directors of the Company hereby confirm that: 1. In the preparation of the Annual Accounts, the applicable accounting standards have been followed along with proper explanation relating to material departures; 2. Appropriate accounting policies have been selected and applied consistently and have made judgements and estimates that are reasonable and prudent, so as to give a true and fair view of the state of affairs of the company as at 31st March, 2011 and of the profit/loss of the company for the said year; 3. Proper and sufficient care has been taken for the maintenance of adequate accounting records in accordance with the provisions of the Companies Act, 1956 for safeguarding the assets of the company and for preventing and detecting fraud and other irregularities; 4. Annual Accounts have been prepared on a going concern basis. COMPLIANCE CERTIFICATE As required by proviso to section 383A of the Companies Act, 1956, your Company has obtained, a Compliance Certificate from Secretary in Whole Time practice and attached the same herewith. PARTICULARS OF EMPLOYEES During the financial year, there were no employees drawing remuneration in excess of the monetary ceiling prescribed under Section 217(2A) of the Companies Act, 1956 read with Companies (Particulars of Employees) Rules, 1975, as amended. CONSERVATION OF ENERGY, TECHNOLOGY ABSORPTION AND FOREIGN EXCHANGE EARNINGS /OUTGO The information required under the above heads in accordance with the provision of Section 217(1)(e) of the Companies Act, 1956, read with the Companies (Disclosure of Particulars in the Report of the Board of Directors) Rules, 1988, are given in Annexure A to this Report. AUDITORS The Company auditors, M/S S. C. Bandi & Co. Chartered Accountants, retire at the ensuing Annual General Meeting and are eligible for reappointment. Your Director recommends their reappointment for the ensuing year. ACKNOWLEDGEMENTS Your Directors takes this opportunity to place on record their gratitude for the confidence reposed in and co operation extended to the Company by the Shareholders for their support. On behalf of the Board of Directors Place : Mumbai H. C. Tandon A. K. Patni Date : 18 th May,2011 Director Director ANNEXURE A TO THE DIRECTORS REPORT Particulars required under the Companies (Disclosure of Particulars in the Report of the Board of Directors) Rule, (A) Conservation of Energy The Company uses only electricity, which is very insignificant in value considering total volume of operation. (B) Technology Absorption Not applicable (C) Foreign Exchange Earnings/Outgo Your Company has earned foreign exchange worth Rs.Nil and has spent foreign exchange worth Rs Nil under the following heads. Particulars: (Rs. In Lacs) (i) Raw Material and Components 0 (ii) Capital Goods 0 (iii) Royalty and Other Expenses 0 0 On behalf of the Board of Directors Place : Mumbai H. C. Tandon A. K. Patni Date : 18 th May,2011 Director Director 32

35 ANNUAL REPORT PCS POSITIONING SYSTEMS (INDIA) LTD. COMPLIANCE CERTIFICATE To, The Members PCS Positioning Systems (India) Limited S No 1A F1 Iranimarket Compound, Yerawada Pune CIN Authorised Capital Paid up Capital U72900PN2004PLC ,00,00,000 1,76,00,000 I have examined the registers, records, books and papers of PCS Positioning Systems (India) Limited as required to be maintained under the Companies Act, 1956, and the rules made thereunder and also the provisions contained in the Memorandum and Articles of Association of the Company for the year ended on March 31, In my opinion and to the best of my information and according to the examinations carried out by me and explanations furnished to me by the Company, its officers and agents, I certify that in respect of the aforesaid year: 1. The Company has kept and maintained all registers as stated in Annexure A to this Certificate, as per the provisions of the Act and the rules made thereunder and all entries therein have been duly recorded. 2. The Company has duly filed the forms and returns as stated in Annexure B to this Certificate, with the Registrar of Companies, Regional Director, Central Government, Company Law Board or other authorities within the time prescribed under the Act and the rules made thereunder. 3. The Company being a Subsidiary of a Public Company, thus Comment on minimum prescribed paid up Capital and maximum number of members is not required 4. The Board of Directors of the Company duly met 6 (Six) times respectively on 29 th April 2010, 17 th May 2010,9 th July 2010,4 th October 2010, 28 th December 2010 and 25th March 2011 in respect of which meetings proper notices were given and the proceedings were properly recorded and signed in the Minutes Book maintained for the purpose 5. The Company has not closed its Register of Members during the year, as it was not required to close the same. 6. The Annual General Meeting for the financial year ended on 31/03/2010 was convened and held on 17/08/2010 after giving due notice to the members and adoption of Annual accounts as on 31st March 2010 were duly recorded in the Minutes Book maintained for the purpose. 7. No Extra ordinary General meeting were held during the year ended March 31, According to the information and explanation given to me, the Company has not advanced any loan to its Directors or persons or firms or Companies referred in the Section 295 of the Act during the financial year under review 9. According to the information and explanation given to me, The Company has not entered into any Contract falling within the purview of Section 297 of the Act during the financial year under review 10. As there were no instances falling within the purview of Section 314 of the Act, the Company has not obtained any approvals from the Board of Directors, members or Central Government. 11. The Company has made necessary entries in the register maintained u/s 301 of the Act for contracts entered during the year. 12. The Company has not issued any duplicate share certificates during the year. a. The Company has delivered all the certificates on allotment of shares and lodgment of shares for transfer, however there were no transmission of securities during the year. b. The Company has not deposited any amount in a separate Bank Account as no dividend was declared during the year. c. The Company was not required to post warrants to any members of the Company as no dividend was declared during the year. d. There is no unpaid dividend; application money due for refund, matured deposits, matured debentures and the interest accrued thereon, which have remained unclaimed or unpaid for a year of seven years. e. The Company has duly complied with the requirements of section 217 of the Act. 13. The Board of Directors of the Company is duly constituted. The Company has not appointed any Director/Managing Director, Whole Time Director during the year under review 14. The Company has not appointed any managing Director or whole time Director or Manager during the year. 15. The Company has not appointed any soleselling agents during the year. 16. According to the information and explanation given to me, The Company was not required to obtain any approvals of the Central Government, Company Law Board, Regional Director, Registrar and/or such other authorities prescribed under the various provisions of the Act during the year. 17. The Directors have disclosed their interest in other firms/companies to the Board of Directors pursuant to the provisions of the Act and the rules made there under. 18. The Company has not issued Equity Shares and Preference Shares during the year. 19. The Company has not bought back any shares during the year. 20. The Company has not redeemed any shares during the year. 21. There were no transactions necessitating the Company to keep in abeyance the rights to dividend, rights shares and bonus shares pending registration of transfer of shares. 22. The Company has not invited/ accepted any deposits including any unsecured loans falling within the purview of sections 58A during the year. 23. The Company has not borrowed from Directors, members, public, financial institutions, banks and others during the year ending 31/03/2011 and that no approval as per Section 293(1)(d) is required to obtained. 24. According to the information and explanation provided to me, The Company has not made loans and investments or given guarantees or provided securities to other bodies corporate during the year under review. 25. The Company has not altered the provisions of the Memorandum with respect to Situation of the Company s registered office from One State to another during the year under review 26. The Company has not altered the provisions of the Memorandum with respect to the Objects of the Company during the year under review 27. The Company has not altered the provisions of the Memorandum with respect to name of the Company during the year under review 28. The Company has not altered the provisions of the Memorandum with respect to Authorized Share Capital of the Company during the year under review 29. The Company has not altered its Articles of Association during the year under review 30. As informed to me, there was no prosecutions initiated against or show cause notices received by the Company and no fines or penalties or any other punishment was imposed on the Company during the year for offences under the Act. 31. The Company has not received any money as security from its employees during the year. 32. The Company has informed us that Company has not deducted Provident Fund during the year under review For Bhavesh Desai & Associates Company Secretaries (Bhavesh Desai) C.P.No.7711 Place : Mumbai Date:

36 PCS POSITIONING SYSTEMS (INDIA) LIMITED ANNEXURE A Statutory Registers as maintained by the Company under the Companies Act, Register of Members u/s Registers & Returns u/s Minutes Book of Board Meetings u/s Minutes Book of General Meeting s u/s Books of Accounts u/s Register of Contracts u/s Register of particulars of Directors etc. u/s Register of Directors shareholding u/s Register of Shares Transfers. For Bhavesh Desai & Associates Company Secretaries Mumbai Date: (Bhavesh Desai) C.P.No.7711 ANNEXURE B Forms and Returns as filed by the Company with the Registrar of Companies, Regional Director, Central Government during the financial year ending on 31 st March 2011 Sr.No Form No/ Return Filed under Section For Date of filing Whether filed within Prescribed Time yes/no 1 Form A Compliance Certificate 08/10/2010 No 2 Form 23 AC & ACA 220 Balance sheet & Profit & loss A/c 11/10/2010 No 3 Form 20B 159 Annual return 19/10/2010 No For Bhavesh Desai & Associates Company Secretaries Mumbai Date: (Bhavesh Desai) C.P.No

37 ANNUAL REPORT PCS POSITIONING SYSTEMS (INDIA) LTD. AUDITOR S REPORT TO THE MEMBERS 1. I have audited the attached Balance Sheet of M/s. PCS Positioning Systems (India) Limited as at 31 st March 2011 and also the Profit and Loss Account for the year ended on that date annexed thereto. These financial statements are the responsibility of the Company s Management. My responsibility is to express an opinion on these financial statements based on my audit. 2. I have conducted my audit in accordance with the auditing standards generally accepted in India. These Standards require that I plan and perform the audit to obtain reasonable assurance about whether the financial statements are free from any material misstatement. An audit also includes examining on a test basis, evidence supporting the amounts and disclosures in the financial statements. An audit also includes, assessing the accounting principles used and significant estimates made by management, as well as evaluating the overall presentation of the financial statements. I believe that my audit provides a reasonable basis for my opinion. 3. As required by the Companies (Auditor s Report) Order, 2003 issued by the Central Government in terms of Section 227(4A) of the Companies Act, 1956, and on the basis of such checks of books and records of the Company as I considered necessary and appropriate and according to the information and explanations given to me during the course of the audit, enclose in the Annexure, a Statement on the matters specified in Paragraph 4 & 5 of the said order. 4. Further to my comments in the Annexure referred to in paragraph 3 above I report that: a) I have obtained all the information and explanations, which to the best of my knowledge and belief were necessary for the purpose of my audit. b) In my opinion proper books of accounts as required by Law have been kept by the Company so far as appears from my examination of such books. c) The Balance Sheet, Profit and Loss Account dealt with by this report is in agreement with the books of accounts. d) In my opinion the Balance Sheet, the Profit and Loss Account and the Cash Flow Statement complies with the mandatory Accounting Standards referred to in subsection (3C) of Section 211 of the Companies Act, e) Based on the representations made by the Directors as on 31 st March, 2011 and taken on record by the Board of Directors of the Company and the information and explanations given to me, none of the Director is, as at 31 st March, 2011, primafacie disqualified from being appointed as a director in terms of clause (g) of subsection (1) of Section 274 of the Companies Act, f) In my opinion and to the best of my information and explanations given to me, the said accounts give the information required by the Companies Act, 1956, in the manner so required and give a true and fair view in conformity with the accounting principles generally accepted in India: i) In the case of the Balance Sheet, of the state of affairs of the Company as at 31 st March 2011 and ii) In the case of the Profit and Loss Account, of the loss for the year ended on that date. iii) In the case of Cash Flow statement, of the cash flow for the year ended on that date. For S.C. BANDI & CO. Chartered Accountants Place: Mumbai Date: 18 th May, 2011 ANNEXURE TO THE AUDITORS REPORT S.C.BANDI (Proprietor) Membership No (i) (a) The Company has maintained proper records showing full particulars including quantitative details and situation of Fixed Assets. (b) The assets have been physically verified by the Management during the period and no discrepancies were noticed on such verification. (c) During the period company has not disposed off any substantial part of its Fixed assets. (ii) The Company do not hold any physical inventories during the current period covered under audit and also in immediately preceding financial year and hence clauses 4 (ii) (b) of the order is not applicable. (iii) (a) The company has not granted any loans to companies, firms or other parties covered in the register maintained under Section 301 of the Companies Act, (b) Since the company has not granted any loans, secured or unsecured to companies, firms or other parties covered in the register maintained under Section 301 of the Companies Act, 1956, clause 4(iii) (b), (c) & (d) of the Order are not applicable. (c) The Company has taken unsecured interest free loan from the parties covered in the register maintained under section 301 of the Companies Act, The maximum amount involved during the period was Rs lacs and the balance at the end of the period is Rs lacs. (d) In my opinion, the rate of interest and other terms and conditions on which loans have been taken from the companies, firms or other parties listed in the register maintained under section 301 of the Companies Act, 1956 are, not prima facie, prejudicial to the interest of the company. (e) There is no stipulation as to the time period for payment of the principal amount of unsecured loans and advance taken. (iv) In my opinion and according to the information and explanations given to me, there are adequate internal control procedures commensurate with the size of the company and the nature of business with regard to purchases of inventory, fixed assets and with regard to the sale of goods. (v) (a) In my opinion and according to the information and explanations given to me, the particulars of contracts or arrangements referred to in section 301 of the Act have been entered in the register required to be maintained under that section. (b) In my opinion, and according to the information and explanations given to me, the Contracts and arrangements entered in the register maintained under section 301 of the Companies Act, 1956 have been made at prices which are reasonable having regard to the prevailing market price (vi) The Company has not accepted any deposits from the public. Accordingly, clause 4 (vi) of the order is not applicable. (vii) In my opinion, the Company has an internal audit system commensurate with the size and nature of its business (viii) The Central Government has not prescribed the maintenance of cost records under Section 209(1) (d) of the Companies Act 1956 for any of the products of the Company. (ix) (a) According to the information and explanations given to me and on the basis of my examination of the record of the Company, the company is regular in depositing with appropriate authorities undisputed statutory dues including provident fund, investor education protection fund, employees state insurance, income tax, sales tax, wealth tax, custom duty, excise duty, cess and other material statutory dues applicable to it. (b) According to the information and explanations given to me, no undisputed amounts payable in respect of income tax, wealth tax, sales tax, custom duty, excise duty and cess were in arrears, as at 31 st March, 2011 or a period of more than six months from the date they become payable. (x) The Company has accumulated losses and also it has incurred cash losses during the year covered by my audit. The company had incurred cash loss during immediately preceding financial period. (xi) In my opinion and according to the information and explanations given to me, the company has not defaulted during the year in repayment of dues to any financial institution, banks or debentures. (xii) According to the information and explanations given me, no loans and advances have been granted by the Company on the basis of security by way of pledge of shares, debentures and other securities. (xiii) In my opinion, and according to the information and explanations given me the company is not a chit fund or a nidhi/mutual benefit fund/society. Therefore, the provisions of clause 4(xiii) of the Companies (Auditor s Report) Order 2003 are not applicable to the Company. (xiv) The Company is not dealing or trading in Shares, Securities and Debentures or other investments. Accordingly provisions of clause (xiv) of the said order are not applicable. (xv) According to the information and explanations given to me, the company has not given any guarantee for loans taken by others from bank or financial institutions. (xvi) The Company has not taken any new term loans during the year. (xvii)according to the information and explanations given to me and on an overall examination of the balance sheet of the company, I report that the no funds raised on shortterm basis have been used for longterm investment. (xviii) During the year, the Company has not made any preferential allotment of shares to parties and companies covered in the register maintained under Section 301 of the Companies Act, (xix) The Company has not issued any Debentures during the financial year covered by our audit. (xx) The company has not raised any money through a public issue during the year. (xxi) According to the information and explanations given to me, no fraud on or by the company has been noticed or reported during the course of my audit. For S.C. BANDI & CO. Chartered Accountants Place: Mumbai Date: 18 th May, 2011 S.C.BANDI (Proprietor) Membership No

38 PCS POSITIONING SYSTEMS (INDIA) LIMITED BALANCE SHEET AS AT 31ST MARCH,2011 PARTICULARS Schedule No SOURCES OF FUNDS SHAREHOLDER'S FUNDS Share Capital [A] 17,600,000 17,600,000 LOAN FUNDS Unsecured Loan [B] 25,000,000 25,000,000 Total... 42,600,000 42,600,000 APPLICATION OF FUNDS FIXED ASSETS Gross Block [E] 16,437,141 17,141,289 Less: Depreciation 11,299,647 10,557,623 Net Block 5,137,494 6,583,666 CURRENT ASSETS,LOANS [C] AND ADVANCES Sundry Debtors 3,062,965 3,063,052 Cash and Bank Balances 50,448 61,757 Loans and Advances 1,165,633 1,979,383 4,279,046 5,104,192 LESS : CURRENT [D] LIABILITIES AND PROVISIONS Current Liabilities 13,050,402 14,056,513 13,050,402 14,056,513 NET CURRENT ASSETS (8,771,356) (8,952,321) PROFIT AND LOSS ACCOUNT Balance as per Annexed Accounts 46,233,862 44,968,655 Total... 42,600,000 42,600,000 PROFIT AND LOSS ACCOUNT FOR THE YEAR ENDED 31ST MARCH,2011 PARTICULARS Schedule No. INCOME Year ended Other Income [1] 780 EXPENDITURE Period ended Operating & Other Expenses [2] 319, ,824 Loss Before Interest & Depreciation 319, ,824 (319,008) (604,824) Depreciation [E] 946, ,198 1,486,009 1,486,009 Loss for the year (1,265,206) (2,090,833) Less: Provision for Taxation Loss for the Year after Taxation (1,265,206) (2,090,833) Balance as per last Balance sheet (44,968,656) (42,877,823) Balance of Loss carried over to Balance Sheet... Basic and diluted Earning per Shares of Rs. 10/ each ( in Rs.) (46,233,862) (44,968,656) (0.72) (1.19) Notes to the Accounts [F] As per my Report of even date For and on behalf of the Board of Directors for S C BANDI & CO. (Chartered Accountants) A.K.Patni Director S C Bandi H. C. Tandon Director (Proprietor) D. B. Maheshwari Director Membership No Yash Bhardwaj Director Place : Mumbai Date : 18 th May, 2011 As per my Report of even date For and on behalf of the Board of Directors for S C BANDI & CO. (Chartered Accountants) A.K.Patni Director S C Bandi H. C. Tandon Director (Proprietor) D. B. Maheshwari Director Membership No Yash Bhardwaj Director Place : Mumbai Date : 18 th May,

39 ANNUAL REPORT PCS POSITIONING SYSTEMS (INDIA) LTD. CASH FLOW STATEMENT FOR THE YEAR ENDED 31ST MARCH,2011 PARTICULARS Year Ended A. Cash Flow arising from Operating Activities: Period ended Net Profit Loss before Tax (1,265,206) (2,090,833) Add: Depreciation 946,198 1,486,009 Interest income (780) Loss on sale of Fixed Assets 300,930 Operating Loss before Working Capital changes (18,858) (604,824) Decrease/(Increase) in Sundry Debtors and Loan & advances 813, ,480 (Decrease)/Increase in Sundry Creditors (1,006,111) 8,018 Cash Generated from Operations.. (211,132) (48,326) B. Cash Flow arising from Investing Activities: Proceeds on sale of Fixed Assets 199,043 Interest received 780 Net Cash from Investing Activities ,823 C. Cash Flow arising from Financing Activities: Repayment of Unsecured Loan taken from Holding Company Proceeds from Unsecured Loans from Directors Interest paid Net Cash from Financing Activities... Net Increase in Cash/Cash Equivalents... (11,309) (48,326) Cash and Cash Equivalents at beginning of year 61, ,083 Cash and Cash Equivalents at end of the year 31st March, ,448 61,757 As per my Report of even date For and on behalf of the Board of Directors for S C BANDI & CO. (Chartered Accountants) A.K.Patni Director S C Bandi H. C. Tandon Director (Proprietor) D. B. Maheshwari Director Membership No Yash Bhardwaj Director SCHEDULES TO BALANCE SHEET AS AT 31ST MARCH, 2011 PARTICULARS SCHEDULE A SHARE CAPITAL AUTHORISED 3,000,000 Equity Shares of Rs.10/ each 30,000,000 30,000,000 ISSUED, SUBSCRIBED & PAID UP 1,760,000 Equity Shares of Rs.10/each, fully paid up (out of which 1,750,000 shares are held by PCS Technology Ltd.the holding company) 17,600,000 17,600,000 Total 17,600,000 17,600,000 SCHEDULE "B" UNSECURED LOAN From Director 25,000,000 25,000,000 Total 25,000,000 25,000,000 SCHEDULE "C" CURRENT ASSETS, LOANS AND ADVANCES SUNDRY DEBTORS (Unsecured & considered good by the Management) a) Debts outstanding for a period 3,062,965 3,063,052 exceeding six months b) Others Debts 3,062,965 3,063,052 CASH AND BANK BALANCES a) Cash in hand 2,000 2,000 b) Balance with Scheduled Bank In Current Account 48,448 59,757 50,448 61,757 LOANS & ADVANCES (Unsecured & considered good by the Management) Advances recoverable in cash or in kind or for value to be received 614, ,006 Sundry Deposits 45,000 45,000 Earnest Money Deposits 65, ,000 Advance payment of tax (Net of Provision) 318, ,233 Advance Fringe benefit tax (Net of Provision) 123, ,144 1,165,633 1,979,383 Total 4,279,046 5,104,192 SCHEDULE "D" CURRENT LIABILITIES CURRENT LIABILITIES Sundry Creditors 12,650,589 13,897,048 Advance from Customers 373, ,465 13,023,963 14,056,513 Other Current Liabilities 26,439 Total 13,050,402 14,056,513 13,050,402 14,056,513 Place : Mumbai Date : 18 th May,